Tata Steel announces 1:2 bonus issue

The board of Tata Steel recommended a 1:2 bonus issue. Following this, existing shareholders will get one share of the company for every two shares they currently hold.

The company will capitalise Rs 184 crore from its reserves of Rs 4,562 crore as on March 31, 2004. It informed the Bombay Stock Exchange that the bonus issue is subject to the approval of the shareholders to be obtained at the annual general meeting on July 22.

The record date for the issue has not been fixed as yet. R C Nandrajog, vice-president, finance, Tata Steel, said, "The performance of the company in the year ended March 31, 2004, has been good and therefore we wanted to reward the shareholders with a 1:2 bonus issue."

The existing paid-up equity share capital of Tata Steel, of 36.8 crore shares, will increase by 50 per cent after the bonus shares are issued.

The Tata Steel scrip today declined 2.12 per cent after the bonus issue was announced, and closed at Rs 308.75 on the Bombay Stock Exchange. Around 2.36 crore shares were traded on the BSE and the NSE today.

Tata Steel had announced on May 20 that it would be issuing bonus shares and that the company's board of directors would meet today to decide the ratio. The company's stock has declined by 3.52 per cent since the announcement of a bonus issue was made on May 20.

On Friday, the share closed up 5.91 per cent at Rs 315.45, after hitting the day's high at Rs 317.95.

Tata Steel posted a 72 per cent rise in its net profit at Rs 1,746.22 crore for the year ended March 31, 2004, compared with a net profit of Rs 1,012.31 crore recorded for the previous year.

The company's net sales for the year stood at Rs 10,702.39 crore, against net sales of Rs 8,721.32 crore in the year ended March 31, 2003.