MM Forgings, a smallcap auto stock, turned ex-bonus on July 16 for its bonus issue ratio of 1:1. The company's board will be meeting on July 17 for the announcement of bonus shares allotment. During the ex-bonus day, the stock price ended in the red, however, MM Forgings is a multi-bagger with all-time gains of around 13,908.42%. An investment of Rs 4,750 in the longest run, will get a corpus of Rs 13.39 lakh thanks to the bonus issue.
MM Forgings Share Price:
The auto components maker's stock price ended at Rs 669.50 apiece, down by 2.24% on BSE with a market cap of Rs 3,232.45 crore. However, during the trading hours of July 16, the stock price did touch a new 52-week high of Rs 725 apiece. It needs to be noted that the stock price is now adjusted to the bonus issue ratio.
While MM Forging's 52-week low is at Rs 415.50 apiece.
Last week, on Friday, the stock ended at Rs 1312.65 apiece on BSE.
Now, the stock's price-to-equity ratio is at 11.28x, while the return on equity (RoE) is at 17.55%.
MM Forgings Bonus Issue:
MM Forgings stock turned ex-bonus on July 16 for its bonus issue in the ratio of 1:1. This means those investors who are holding MM Forging shares by the end of July 16 in their demat accounts will be entitled to allot of bonus equity shares in the ratio of 1:1 i.e., 1 (One) Equity Share of ₹10/- each for every 1 (One) existing Equity Share of ₹10/- each.
MM Forgings Bonus Issue Allotment:
The company announced that it will be holding a meeting on Wednesday, July 17, 2024, to approve the allotment of Bonus shares and any other matter as may be specified in the agenda.
How To Calculate Gains:
Adjusted to the bonus issue ratio, the all-time gains currently in MM Forgings is around 13,908.42%. The stock price was merely at Rs 4.75 per share on June 27, 1997.
As per Zerodha's blog, when the bonus shares are issued, the number of shares the shareholder holds will increase, but an investment's overall value will remain the same.
Hence, the earlier price of over Rs 1,300 of MM Forgings has been halved to over Rs 600.
Let's suppose, an investor bought 1,000 shares of MM Forgings in June 1997, then their investment value will be around Rs 4,750 at that time. Considering the investor held onto these shares even on July 16, 2024, then the corpus value will turn to Rs 13,39,000.
1,000 shares at a bonus ratio of 1:1 will get another 1,000 bonus shares. This will lead to total shares of 2,000 in MM Forgings. 2,000 shares at the current market price is about Rs 13,39,000. Before the ex-bonus date, the corpus was about Rs 13,12,650 as of July 15, 2024, when the price was Rs 1,312.65 apiece.
MMF is a leading manufacturer of closed-die hot forgings. All its forging lines are equipped with state-of-the-art billet temperature control mechanisms. MMF boasts of a wide variety of production lines to cater to satisfy the variety of customer needs.
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