1:1 Bonus Shares: Stock Jumps After Announcing Bonus Issue and Capital Expansion Plans

Synopsis: Mini Diamonds has announced  a bonus share issue along with a capital increase, reflecting confidence in its financial position while aiming to improve liquidity and make the stock more accessible. 

The shares of this micro cap company majorly engaged in the business of manufacturing and trading of Diamonds jumped over 6 percent from its day’s low after announcing bonus issue for its shareholders.

With the market capitalization of Rs. 214 Crores, the shares of Mini Diamonds ltd reached an intraday high of Rs. 18.38 per share raising nearly 6.5 percent from its days low of 17.25 per share and is trading at a P/E of 41.6 whereas industry P/E stands at 21.5

What is the NEWS

Mini Diamonds has announced a 1:1 bonus issue, under which shareholders will receive one additional equity share of Rs. 2 for every one share held. The company will issue 117,845,580 bonus shares, amounting to Rs. 23.56 crore, by utilising its reserves. 

Its available free reserves stand at Rs. 39.19 crore, which is sufficient to support this issuance. Post the bonus, the total number of shares will increase to 235,691,160 shares, and the paid-up capital will rise from Rs. 23.56 crore to Rs. 47.13 crore. The record date will be decided after shareholder approval, and the shares are expected to be credited within two months of approvals. 

Alongside the bonus issue, the company has approved an increase in authorised share capital from Rs. 30 crore to Rs. 50 crore. The increase is subject to shareholder approval and ensures that the company has enough headroom to accommodate the bonus shares and any future capital requirements. This step strengthens the company’s financial structure and provides flexibility for future growth or fundraising needs.

About the Company and Financials

Mini Diamonds (India) Limited, incorporated in 1987, operates in the gems and jewellery sector. The company is engaged in manufacturing, trading, and exporting cut and polished diamonds, rough diamonds, and studded jewellery. It serves both domestic and international markets, including the UK and Hong Kong. With operations spanning sourcing to finished products, the company runs from Mumbai and caters to global demand, making it a small-cap player influenced by industry cycles.

Year on Year analysis: Revenue from operations has increased from Rs. 115.6 Crores to Rs. 166.64 Crores, up 44 percent. Operating profit has increased from Rs. 2.33 crore to Rs. 4.41 Crores, up 89 percent and net profit has increased from Rs. 2.25 Crores to Rs. 3.26 Crores, up 44.8 percent 

Quarter on Quarter analysis: Revenue from operations has increased from Rs. 149.44 crores to Rs. 166.64 Crores, up 11.5 percent. Operating profit has increased from Rs. 3.25 Crores to Rs. 4.41 Crores, up 35.6 percent and net profit has increased from Rs. 2.78 Crores to Rs. 3.26 Crores, up 17 percent 

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