Small-cap VST Industries announces 10:1 bonus issue; share price soars 7%

VST Industries in focus: VST Industries stock price rallied as much as 7.41 per cent to hit an intraday high of Rs 4,290 per share on Friday, July 26.

The uptick in stock price came after the company announced a bonus issue for the first time.
 

In an exchange filing, VST Industries said, “We hereby inform that the Board has recommended issue of Bonus Shares in the ratio of 10:1 i.e. ten new bonus equity shares of Rs 10 each for every one existing equity share of Rs 10 each fully paid up subject to the approval of Members at the ensuing 93 Annual General Meeting of the Company.”

 

This means the company will issue 10 bonus shares for every one share held by shareholders as on the record date post its first quarter results.

A bonus issue is a proposition extended to current shareholders, inviting them to acquire additional shares. Rather than augmenting dividend payouts, companies opt to distribute extra shares among shareholders. 

The Board has fixed Friday, August 30, 2024 as Record date to determine the eligibility of Members to receive bonus shares. 

Financial performance

VST Industries net profit also fell 36 per cent year-on-year (Y-o-Y) to Rs 53.6 crore. Its revenue or topline fell 3.5 per cent Y-o-Y to Rs 321.3 crore. 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) declined 30.4 per cent year-on-year to Rs 73.3 crore. 

Consequently, the Ebitda margin for the quarter contracted to 22.8 per cent, as compared to 31.6 per cent a year ago.

Founded in 1930 and headquartered in Hyderabad, VST Industries is a prominent Indian manufacturer of cigarettes and tobacco products. Operating under various brand names such as Total, Charms, Charminar, Editions, Special, and Moments, VST Industries is the second largest cigarette manufacturer in India. 

Originally known as the Vazir Sultan Tobacco Company, it was once affiliated with the British American Tobacco Group from the United Kingdom. VST Industries became an independent entity and was officially registered as VST Industries Ltd in 1983.

The market capitalisation of VST Industries is Rs 6,349.64 crore, according to Bombay Stock Exchange (BSE).

At 10:36 AM, shares of VST Industries were trading 2.96 per cent higher at Rs 4,111.95 per share. In comparison, BSE Sensex was trading 0.69 per cent higher at 80,593.97 levels.