TVS Motor Co’s shares have risen after the company’s announcement to issue cumulative non-convertible redeemable preference shares for about ₹1900 crore as a bonus to its shareholders.
“Pursuant to the scheme, 4 NCRPS of INR 10/- each fully paid up of the Company are proposed to be issued, by way of bonus, for every 1 equity share of Re 1 each fully paid up to the shareholders of the company by utilising its general reserves/retained earnings,” TVS Motor said in an exchange filing.
These preference shares to be issued are non-convertible and redeemable, shall not have voting rights and shall not increase the company’s equity capital or create any debt for the company.
Also, they will have no immediate payout and will accumulate cumulatively and be paid as cash on redemption.
“Assuming the existing number of equity shares of the Company, an amount of around ₹1900 crore will be utilized from general reserves/retained earnings of the company for issuance of bonus NCRPS, under the scheme,” TVS Motor said.
It added that the general reserve balance/retained earnings as of 31 December 2021, stood at ₹7574 Crore. The face value and the issue price of ₹10 each, with a coupon rate of 6% will be redeemable after 12 months from the date of allotment.
The shares issued under the scheme will be listed in NSE Ltd. and BSE Ltd. where the equity shares of the company are listed, it said. The company said that it is subject to necessary approvals and changes to the articles and memorandum of association.
Last week, the company’s board of directors declared an interim dividend of ₹ 8 per share for the financial year 2024, the cost of which is ₹380 crore. The company has reported a year-to-date financial year 2022-23 net profit of ₹1598 crore.
As of 10:55 am, TVS Motor shares are trading 1.43% higher at ₹2064.15 on the positive response to the bonus shares issuance plan.
