Shares of travel agency Easy Trip Planners Ltd, on Monday traded with gains of 1.9% in mid-day trade at Rs 409.85 apiece on BSE after announcement of a bonus issue and stock split. The stock had risen to as much Rs 419 per share in early trade on Monday.
The company's board approved bonus issue of three shares for every one share held i.e., 3:1 ratio and also has given nod for the stock split in the ratio of 1:2.
“This is to inform that the board at its meeting held today i.e., 10th October, 2022, has inter-alia, considered and approved the following items subject to shareholder’s approval: Sub-division/Split of each existing equity share of face value of ₹2/- into 2 equity shares of face value of ₹1/- fully paid- up and the issue of three bonus equity shares for every one fully paid-up equity share," the company announced in an exchange filing today.
It added that bonus shares will be issued out of free reserves created out of profits of the company available as at March 31, 2022 and the estimated date by which such bonus shares would be credited/dispatched would be within 2 months from the date of board approval i.e. by 8 December, 2022.
Explaining the rationale, it said that "the company and its subsidiaries have grown significantly, in terms of business and performance, over the years. This is reflected in the share price of the company. As and when the stock price rises further, it will be increasingly difficult for small potential shareholders to partake in the company's future. Keeping with the spirit of inclusion and in order to reward the shareholders. the Board of Directors at its meeting held today, approved and recommended the said corporate actions."
A stock split increases the number of shares that are outstanding by issuing more shares to the current shareholders. A company engages in stock split decision to make its stock more affordable if its price levels are very high, which in thus would lead to increase in liquidity in the stock. Meanwhile, bonus shares are fully paid additional shares issued by a company to its existing shareholders.
Further, the board has also increase in authorised share capital from Rs 75 crore to Rs 200 crore and an alteration in capital clause of Memorandum of Association.
EaseMyTrip provides travel agents access to its website to book domestic travel airline tickets in order to cater to the offline travel market in India.
