GAIL Rises Ahead of Bonus Shares Issue; What Investors Should Know

GAIL Share Price: Shares of Gas Authority of India Ltd. (GAIL), rose nearly a per cent to Rs 92 apiece on the BSE in Tuesday’s opening deals as the stock started trading ex-bonus, a day ahead of its record date for the bonus issue of equity shares.

The company has fixed September 7, 2022, as the record date for the purpose of ascertaining the eligibility of shareholders for the issuance of bonus shares. Ex-date is a day ahead of the record date for the investors to be eligible for bonus shares. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.

India’s largest natural gas company, GAIL announced a 1:2 bonus issue in July, after its quarterly results. This implies that the shareholders will receive one bonus share for every two shares they hold.

“We wish to inform that at its Board meeting held today i.e. 27th July, 2022, the Board recommended the issuance of Bonus Shares in the ratio of 1:2 i.e. One new bonus equity share(s) of Rs 10/- each for every two existing equity share(s) of Rs. 10/- each fully paid up, subject to the approval of the shareholders at the 38th AGM of the company to be held on 26th August, 2022,” the company had informed in an exchange filing.

What is Ex-Bonus?

Ex-bonus is an important date for investors to be eligible for bonus shares. Generally, to be eligible for bonus shares, an investor should buy the stocks of a company at least one day or two days before the ex-date. This is because of the T+1 and T+2 settlement cycle.

On BSE, the large-cap stock Gail is listed under the ‘A’ group with the ‘T+2’ settlement cycle. Under the ‘T+2’ settlement option, the shares you bought will get credited to your Demat account after two days.

GAIL Financials

Govt-owned GAIL is a natural gas explorer and producer engaged in natural gas processing and distribution in India. The largest gas utility reported a 51 per cent jump in its June quarter net profit on the back of bumper margins from gas marketing, at Rs 3,250.9 crore, as compared to Rs 2,157 crore in the same period a year back. Turnover more than doubled to Rs 38,033 crore in the April-June quarter, from Rs 17,702 crore a year back.

The margin on gas marketing made up for a 12.5 per cent decline in earnings from the gas transportation business and a 74 per cent drop in petrochemicals earnings.

Should you Invest?

Earlier, in a report on August 28, ICICI Direct has given a buy call on the counter after the company reportedly got into discussions over the import of natural gas to India from Gazprom Singapore, a subsidiary of Gazprom Germany where the Russian company holds a stake.

It feels India is expected to benefit from this as the contracted gas would be procured at a price lower than spot LNG prices.

Lowering of gas sourcing costs will be favourable for gas utilities such as Gail India and Petronet LNG as volume offtake is likely to increase for sectors such as CGD, fertiliser, etc.

The brokerage recommended a buy call on Gail India with a target price of Rs 160/share.

The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Read all the Latest Business News and Breaking News here

Source link

Leave a Comment