IGL Bonus Shares: Indraprastha Gas Shares Rise 4% As Board To Consider Bonus Issue – News18
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With this move, IGL becomes the first in its sector to propose issuing free shares to shareholders
IGL shares rise on bonus issue plans
Shares of natural gas distribution company Indraprastha Gas (IGL) rose as much as 4% on Thursday’s early trade, reaching Rs 374.80 on the BSE, following the announcement that the company plans to propose a bonus share issue at its upcoming board meeting on December 10.
In a statement released on December 4, IGL said, “A meeting of the Board of Directors is scheduled for December 10, 2024, to consider the proposal for the issuance of Bonus Shares to the equity shareholders of the company in a ratio to be fixed, subject to shareholders’ approval.”
This announcement follows IGL’s interim dividend of Rs 5 per share in November and a final dividend declared in September. If approved, this will mark the first time the company has declared a bonus share issue for its shareholders.
With this move, IGL becomes the first in its sector to propose issuing free shares to shareholders, a step not taken by its City Gas peers such as Mahanagar Gas (MGL) or Gujarat Gas.
In 2017, IGL had undertaken a stock split, converting one Rs 10 face value share into five Rs 2 face value shares. Similarly, Gujarat Gas carried out a stock split in 2019, while MGL still maintains a Rs 10 face value for its shares.
The announcement of IGL’s board meeting comes amidst a sharp decline in its stock price, which is down over 35% from its recent peak of Rs 570. Mahanagar Gas has also seen a 36% drop from its peak of nearly Rs 2,000, while Gujarat Gas is down about 30% from its recent high.
Last month, IGL announced a 20% reduction in its domestic gas allocation, effective from November 16, following a similar reduction in October. As a result, IGL, MGL, and Gujarat Gas raised their prices, but analysts believe these price hikes may not be enough to offset the reduction in supply.
Market expert Prakash Diwan noted on November 18 that while there may be opportunities to buy these stocks in the future, it would be prudent to wait for a few months to allow the situation to stabilize.
Shares of IGL closed 0.3% lower on Wednesday at Rs 360.2.
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