Shares of Kitex Garments Limited rose sharply, hitting a 5% upper circuit on Tuesday, November 19, reaching ₹635.30. This increase is linked to the company’s announcement regarding bonus shares.
Kitex Garments plans to issue bonus shares after a gap of seven years. The last time the company issued bonus shares was in 2017, offering a 2:5 ratio, meaning shareholders received two shares for every five they held.
Board Meeting Scheduled for Bonus Share Proposal
On Monday, the company informed the stock exchanges that it plans to issue bonus shares.
The board of directors will meet on Friday, November 22, to discuss and finalize this proposal. Shareholders are eagerly awaiting the outcome of this meeting.
What Are Bonus Shares?
Bonus shares are free shares issued by companies to their shareholders. These shares are distributed without any additional cost to capitalize on the company’s reserves, boost earnings per share (EPS),
and increase paid-up capital. They are particularly attractive to retail investors because they make shares more affordable when prices rise significantly.
However, only investors who purchase the stock before the ex-date will be eligible for these bonus shares.
Current Status of Kitex Garments Shares
Kitex Garments is currently under Phase 1 of the long-term Additional Surveillance Measure (ASM) framework. In this phase:
1) A 100% margin is required for trading.
2) The stock trades within a daily price band of 5% or less.
3) The stock cannot be pledged or traded with intraday leverage.
Stocks under ASM can exit this framework after meeting specific criteria for 5–15 trading sessions.
Kitex Garments shares have performed impressively this year, rising nearly threefold in 2024 and delivering a 183% gain year-to-date.
Kitex Garments’ stock is currently under Phase 1 of the long-term ASM (Additional Surveillance Measure) framework.
In this phase, a 100% margin is required to trade the stock, and the stock can only move within a daily price band of 5%. This means it cannot be used for intraday trading or leveraged trading.
If the stock no longer meets the conditions, it can exit ASM Phase 1 after 5 to 15 trading sessions. Kitex Garments’ stock has nearly tripled in value during 2024, with a 183% gain so far this year.
