1:1 Bonus Issue, 1:2 Stock Split: Multibagger Steel Stock Gives 29% Returns In 7 Days, To Turn Ex-Date Soon

Steel stock Rudra Global Infra Products has been on a winning streak for seven consecutive days. The stock has given a massive 29% return in the last seven trading sessions. The reason behind the strong buying in Rudra Global is that investors are looking to avail the benefits of the bonus issue and stock split which is nearing next week.

On October 13th, Rudra Global shares ended at Rs 138.60 apiece, up by 4.5% on BSE despite market bears. This would be its seventh consecutive day rally. Since October 5th, the stock has been bullish and rallied by nearly 29% on the exchange.

Rudra Global Infra is listed only on BSE.

Earlier this month, Rudra Global fixed October 18 as the record date to determine eligible shareholders for its 1:1 bonus issue and 1:2 stock split. That means the stock will also turn ex-bonus and ex-split on the record date.

Stock Split:

Its 1:2 stock split includes that -- every fully paid-up ordinary share having a face value of Rs 10 each will be sub-divided into two fully paid-up ordinary shares having a face value of Rs 5 each.

Typically, listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, the number of shares held rises in the investors' portfolio of that specific stock.

Bonus Issue:

The 1:1 bonus issue means that eligible shareholders will receive 1 bonus equity share of face value of Rs 5 for every 1 (one) fully paid-up equity share of Rs 5 of the Company.

Bonus shares are issued in a certain proportion only to the existing shareholders free of cost. Under this corporate action, new shares are issued at the existing Face Value of equity shares of the company. Hence, the face value remains the same post-bonus issue.

On Trendlyne, Rudra Global Infra is referred to as a 'Strong Performer' as these are those stocks with high DVM scores, rating above 50-55 across Durability, Valuation and Momentum.

As per the ICICI Direct website, Rudra Global's key strengths are -- strong annual EPS growth, RoCE improving in the last 2 years, and Return on equity (ROE) improving in the last 2 years. Among the opportunities is that the stock has recovered from 52 Week's Low significantly.

From its 52-week low of Rs 54.25 apiece, the stock has emerged as a multi-bagger with an upside of a whopping 155.5% on BSE.

Further, as per Trendlyne data, the stock's relative strength index (RSI) and money flow index (MFI) are overbought at 76.5 and 94.7. Its TTM PEG Ratio is less than 1, at 0.6%. The TTM PE Ratio is above the industry median at 24.1. However, its price-to-book ratio is higher than the industry level at 3.8. But the stock has a very low volatility indication as its 1-year Beta comes at 0.7.

Rudra Global Infra Products Limited is engaged in iron and steel products such as the manufacturing of billets and mild steel (MS), and thermomechanical treatment (TMT) bars. Also, the products range from Rudra TMT Bar, and Rudra Wires, to Rudra Pipes.