Nalco issues bonus shares, opting stock-split

BHUBANESWAR: In a move to give a push to market capitalization and enhance value to the shareholders, the National Aluminium Company Limited (NALCO) - the Navratna PSU, for the first time has opted for capital restructuring by splitting a share of Rs 10 into two shares of Rs five each.

The aluminium major has approved 1:1 bonus, that is one bonus share for each share held, while taking into account the Q3 results in its Board Meeting held on January 31.

“There has been consistent demand by shareholders to give bonus keeping the profit and heavy reserves in mind. By enhancing the number of shares and reducing the price for each share, the float and liquidity of the share shall be enhanced in stock exchange,” Nalco director, finance B.L. Bagra on Wednesday told “The ET”.

“This is also expected to increase the market capitalization and enhance value to the shareholders,” Mr Bagra added.

Nalco’s paid-up capital of Rs.644.31 crore would stand enhanced to Rs.1288.62 crore, without any cash consideration, once the Board’s resolution is endorsed by the shareholders in a meeting likely to be convened in March 2011.

By amending the Article of Association, Nalco also has created a provision for issue of ESOP that is shares to its employees. The ESOP is planned to be issued to the executives of the company as part payment of dues to them under performance related payment (PRP), a component of revised pay package. The detailed scheme of ESOP, including price, is yet to be finalized, Mr Bagra clarified.