1:1 Bonus Share: Stock skyrockets 15% after board approves and sets record date for bonus issue

A micro-cap stock engaged in trading activity of wood pulp, paper and waste paper, surged 15 percent following the announcement of a bonus issue and plans to raise capital, attracting investor attention and boosting market momentum.

Price Movement

During Thursday’s trading session, shares of Dhanalaxmi Roto Spinners Ltd reached an intra-day high of Rs.236.45 per share, rising 2.07 percent from its previous close of Rs.204.70 per share. However, the stock declined later to Rs.206.65 each. Over the past five years, the stock has delivered 1,700 percent. 

What Happened

Dhanalaxmi Roto has approved the issuance and allotment of 39,00,300 bonus equity shares in a 1:1 ratio, with the record date set for 26th March 2025. For every existing share held by a shareholder, one additional bonus share will be allotted. The bonus issue is expected to enhance liquidity and attract further investor interest.

In addition, shareholders have given their approval for a significant increase in the company’s authorized share capital, raising it from Rs.5 crore to Rs.15 crore. This change, made through an amendment to the Memorandum of Association, was discussed and approved at the Extra-Ordinary General Meeting held on 14th March 2025 via video conferencing. The move is aimed at providing the company with more flexibility for future growth and expansion.

Also read: How TCS, Persistent Systems, and HCL are Handling Recession Concerns? Here’s What Analysts Predict

Product and Offerings

DhanRoto offers a diverse array of products, including wood pulp and paper goods. Its wood pulp range encompasses both bleached and unbleached pulp, while its paper products include sack kraft paper, newsprint, and specialized papers for various uses. Additionally, the company exports agro products such as cottonseed hull, cottonseed meal, and maize, catering to international markets.

Earnings Report

According to its recent financial updates, Dhanalaxmi Roto Spinners Ltd reported consolidated revenue of Rs.68.88 crores in Q3 FY25, marking a 40 percent increase from Rs.49.54 crores in Q3 FY24. However, the company saw a fall in net profit to Rs.2.49 crores, falling 32 percent from Rs.3.67 crores in the same period last year.

Ratio Analysis

The company has a Return on Capital Employed (ROCE) of 23.4 percent and a Return on Equity (ROE) of 18.69 percent. Its Price-to-Earnings (P/E) ratio stands at 9.49, lower than the industry average of 44.49. Furthermore, the company maintains a current ratio of 3.27, a debt-to-equity ratio of 0.11, and an Earnings Per Share (EPS) of Rs.21.57. 

Written by – Siddesh S Raskar

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