Construction material supplier BigBloc Construction dished out some good news for its investors on July 19th, 2024. The company’s board of directors approved a shareholder-friendly move – a 1:1 bonus share issuance. In simpler terms, this means that for every existing share a shareholder currently holds in BigBloc Construction, they will receive one additional bonus share. This essentially increases the number of outstanding shares in the company without any additional cash outlay.
The issuance of bonus shares is a strategic decision often employed by companies to achieve multiple objectives. Primarily, it serves to reward existing shareholders by increasing their stake in the company without any additional investment. This can improve investor sentiment and potentially lead to a rise in the stock price. Additionally, the bonus share issuance can enhance the company’s liquidity by increasing the number of shares trading in the market. Furthermore, it can strengthen the company’s capital structure by boosting its paid-up capital ratio, which is a metric used to gauge a company’s financial health.
The announcement of the bonus share issuance was well-received by investors, with BigBloc Construction’s share price witnessing a surge of 7% on the BSE during the day. The record date for the bonus share issuance is yet to be determined by the company, but it will likely be announced in the coming weeks. This will be the date after which any new share purchases will not entitle the investor to the bonus shares.
Overall, BigBloc Construction’s decision to issue bonus shares reflects a commitment to rewarding its shareholders and potentially bolstering its financial standing.
