REC's record date for bonus shares issue next week. Key things to know

13 Aug , 2022 By : Kanchan Joshi

Public enterprise REC Limited, formerly Rural Electrification Corporation Limited, had announced that its board has recommended bonus shares issue in the ratio of 1:3 and also fixed the record date for the same which is next week on Thursday, August 18, 2022. The stock will start trading ex-bonus on Wednesday, a day ahead of the record date.

“The Board of Directors has recommended the issue of Bonus shares to the shareholders of the Company in the ratio of 1:3, i.e. one (1) bonus equity share of Rs10- each fully paid-up for every three (3) existing equity shares of Rs10- each fully paid- up to the eligible members, subject to the approval of shareholders through postal ballot," REC informed in an exchange filing.

Further, the company has fixed record date for ascertaining entitlement of Thursday, August 18, 2022 eligibility of shareholders for bonus shares. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.

Earlier this week, the company said it received shareholders' approval for the proposal to issue 65.83 crore bonus shares, utilising capital reserves of Rs658.3 crore.

The company in an exchange filing said that “two resolutions as set out in the Postal Ballot Notice dated July 8, 2022, of the Company have been approved by the shareholders with requisite majority." The resolutions were the approval to appoint Vivek Kumar Dewangan as its Chairman and Managing Director and to capitalize the reserves and issue Bonus shares to the shareholders of the company.

REC Limited is a Navratna company under the administrative control of the Ministry of Power. It funds its business with market borrowings of various maturities, including bonds and term loans apart from foreign borrowings, on its own. REC shares are up over a per cent in 2022 (YTD) so far, whereas the stock is down more than 6% in a year's period.

REC's consolidated net profit for Q1 FY23 came at rs2,454 crore as compared to Rs2,268.6 in the same quarter last year. Its total income, however, fell to Rs9,506 crore in the quarter under review, from Rs9,555 crore in the year-ago quarter.