Marico Industries unveils 1:1 bonus

Marico Industries has announced a bonus issue to its shareholders in the ratio of 1:1 (one share for every share held), aggregating Rs 29 crore. This will mark Marico's second equity bonus issue in less than 12 months. The previous issue was in April 2003.

The board, which met here today, has recommended a third interim dividend of 25 per cent on the equity capital of Rs 29 crore and also decided to opt for an early redemption of eight per cent bonus redeemable preference shares (RePS) of Rs 29 crore by March 31. The latest interim dividend is the twelfth consecutive dividend declared by Marico.

"Marico has been delivering consistent financial performance for the past 17 quarters now and its new product/business turnover has been rising at around 20 per cent," company chairman and managing director Harsh Mariwala said in a media release.

Against this backdrop, Marico was confident of servicing the larger equity arising from the bonus and continuing its progressive distribution policy, while exploring other innovative avenues of distribution to shareholders, Mariwala said.

The proposed bonus issue would ensure that more equity shares would be available for trading. The bonus issue in April 2003 had led to doubling of the floating stock to one crore shares.

Marico, in September 2002, had issued the RePS, due for redemption on or before October 1, 2005, but the company said it decided to redeem them earlier as it saw little need for investments in business in the near future.

The company stated that it has a comfortable liquidity position well beyond the "war chest" of Rs 25 crore and with limited requirements for investments foreseen for business in the near future, it made sense for an early redemption of the RePS.

The record date for both the redemption of RePS and the third interim dividend is March 23. The bonus equity shares would be allotted to shareholders after receiving an approval at the extraordinary general meeting convened on April 21. The share price of Marico was listless on the Bombay Stock Exchange which closed 0.46 per cent up at Rs 283.35.