Smallcap IT firm recommends 1:1 bonus share: Check record date

Stock market news: Small-cap IT consulting company Newgen Software, in its board meeting on Monday (November 27), recommended the issue of a 1:1 bonus share. This means that investors holding the scrip will get 1 additional share for free for every share held by them.

“Recommended the issue of Bonus Shares in the proportion of 1:1 i.e. 1 (One) new fully paid-up bonus equity share of Rs.10/- (Rupees Ten only) each for every 1 (One) existing fully paid-up equity share of Rs.10/- (Rupees Ten only) each held by the Members of the Company as on the Record Date, subject to approval of the Members through Postal Ballot,” said the company’s regulatory filing.

For the purpose of ascertaining shareholders’ eligibility, the IT company offering business process management, enterprise content management, and other services said that the record date for the bonus issue is January 12.

The company, as part of the plan, will issue 7,00,69,401 equity shares with a face value of Rs 10 per share. Further, the bonus equity shares will be issued out of the securities premium account of the company as of March 31, 2023, said the company in its filing.

In a bonus share issue, the face value remains the same after the issue. Further, the share price gets reduced in proportion to the number of shares issued.