Mumbai: Shares of state-run Hindustan Petroleum Corporation(HPCL) surged over 8 per cent to a fresh 52-week high of Rs 1,215 on the National Stock Exchange on Thursday after the oil marketing company's board approved a 2:1 bonus issue.
"The board of directors of the company at its meeting held on July 20, 2016, inter alia, have considered and recommended increase in authorised share capital to Rs.2,500 crore and further recommended capitalisation of reserves and issue of fully paid bonus shares in the ratio of 2 bonus equity share of Rs. 10 each for every 1 existing equity share of Rs. 10 each," HPCL said in a release to Bombay Stock Exchange.
HPCL will seek the approval of its shareholders for the bonus issue in its forthcoming annual general meeting on September 8, 2016.
Bonus share are taken positively by the investor community as it shows management's confidence to service the additional equity (increase its profits and distribute dividends).
As of 11.24 a.m., HPCL shares traded 4.13 per cent higher at Rs 1,167.30 a piece compared to a flat Nifty.