Keep Watch on These 2 Stocks with Bonus Announcement

  • Stock Market Analysis
  • Editors Pick

On November 22, the benchmark Indian equity index BSE Sensex tumbled by 1,170 points or 1.96%. The selloff mania eroded over Rs 8 lakh crore of investors' wealth. Indian equity markets witnessed their biggest intraday decline in almost seven months. The BSE Sensex tanked 1,625 points in intraday trade before ending the day at 58,465.89. NSE benchmark Nifty50 index closed the day 348.25 points or 1.96% lower at 17,416.55. Nifty50 saw an intraday low of 17,280.45. It makes sense to accumulate bonus shares in the falling markets provided the credentials of the companies are good. We have come up with two stocks that have announced bonus share issues. 

Indian Energy Exchange Ltd (NS: IIAN )

Indian Energy Exchange Limited operates a power trading platform for the physical delivery of electricity. The company enables price discovery and risk management for participants of the electricity market. Indian Energy Exchange serves metal, food processing, textile, cement, ceramic, chemicals, automobiles, and information technology industries in India. The company's board has recommended a bonus issue of equity shares in the proportion of 2:1, subject to shareholders’ approval. Indian Energy Exchange has fixed December 6 as the record date for finding out the eligibility of shareholders entitled for issuance of bonus shares. The company recommended a bonus issue of equity shares in the proportion of two shares of Rs 1 each for every one existing share of Rs 1 each held by the shareholders as on the record date. Bonus equity shares are issued in order to increase the liquidity of the stock. Another major intention is to decrease its stock price to make it affordable for investors. Bonus equity shares are fully paid additional shares issued by a company to its existing shareholders.

In the quarter ended September 2021, IEX Ltd reported a 69% year-on-year rise in standalone net profit at Rs 78 crore as compared to Rs 46 crore in the year-ago quarter. The scrip declined 2.21% closing at Rs 768.35 on November 22 mayhem. But, note that it has skyrocketed an astonishing 272% in a year. On a year-to-date time frame, IEX stock returned ~249%, 109.3% in six months, and ~10% in a month. It, however, declined 4.2% in the last five days. In September 2021 quarter, FIIs/FPIs and mutual funds raised their stake by 1.08% and 0.23% respectively. The stock has a mixed signal based on key technical indicators. While RSI and MACD appear unattractive, the stock appears good based on 50-day/100-day/200-day EMA.

IEX

Apollo Pipes Ltd (BO: AOLL )

Apollo Pipes Limited manufactures and distributes pipe systems. The company offers pipe fittings, sprinkler systems, and solvent cement. On October 22, Apollo Pipes announced the issue of bonus shares in the ratio of 2:1. The record date for the same is December 4 and the ex-bonus date is December 2, 2021. For the quarter ended September 30, 2021, the company's total income was Rs 208.28 crore, as against Rs 125.23 crore in the corresponding quarter of FY2021. It translates into a year-on-year rise of 66%. Its net profit was Rs 14.05 crore, as against Rs 9.5 crore in Q2FY2021. Apollo's EPS stood at Rs 10.71, as against Rs 7.25 in the corresponding quarter of FY2021 reflecting a 47.7% Y-o-Y rise.

The company’s revenue and net profit CAGR for a 3-year period remained at 22% and 26% respectively. Mutual funds and DIIs holding in the company consecutively increased in the last three quarters. The stock delivered fantastic returns of 155% in a year, 133.6% in year-to-date, and 51% in the past six months. The scrip, however, doesn’t appear good based on key technical indicators such as RSI, MACD, and 50-day/100-day/200-day EMA.   

APL

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