Stock Split Plan Also Gets Nod

THE ITC board has cleared the company's proposal to issue bonus shares in the ratio of 1:2. The board, which met here on Friday, also approved the company's proposal for stock split and rise of its authorised share capital by Rs 200 crore to Rs 500 crore. The proposed stock spilt will see every Rs 10 paid-up ordinary share of ITC get sub-divided into 10 shares of Re 1 each. In a letter sent across to stock exchanges after the board meeting, the company said it plans to issue one bonus share of Re 1 each for every two shares held of Re 1 each to the existing shareholders.

Incidentally, the tobacco-to-hotels major had last issued bonus shares sometime in 1994 in the ratio of 1:1. Prior to that, it had also issued bonus shares in 1978, 1980, 1989 and 1991. To facilitate the issue, the company intends to increase its authorised share capital. From Rs 300 crore divided into 30,00,00,000 ordinary shares of Rs 10 each, the company's authorised share capital will stand enhanced to Rs 500 crore divided into 500,00,00,000 ordinary shares of Re 1 each, the company stated in its letter. All the three resolutions will be tabled at the company's forthcoming annual general meeting slated for July 29 to seek approval of shareholders.

ITC scrip spurts on BSE, NSE

On Friday, the company's stock touched an intra-day high of Rs 1,575 before closing at Rs 1,547.10 on the Bombay Stock Exchange (BSE). It closed at Rs 1,545 a share after touching an intra-day high of Rs 1,573.70 on the National Stock Exchange (NSE). The bonus issue comes close on the heels of the recommendation for dividend of Rs 31 per share of Rs 10 each for the fiscal 2004-05. The dividend will entail a cash outflow of Rs 881.69 crore. For the year ended March 31, 2005, the company clocked a 37.57% rise in net profit to Rs 2,191.40 crore (Rs 1,592.85 crore) and a 12.83% growth in gross sales revenue at Rs 13,585.39 crore (Rs 12,039.92 crore).