Gujarat Toolroom’s share price has been making waves, hitting the 5% upper circuit for two consecutive days. This surge follows the company’s announcement of a potential 5:1 bonus share issuance, a move that signals exciting prospects for shareholders. But what exactly does this mean for investors, and how has the company performed in recent years?
Gujarat Toolroom’s bonus issue: What’s happening?
On January 2, Gujarat Toolroom shares locked in their 5% upper circuit at ₹18.08 after the company announced a board meeting scheduled for January 6, 2025. The agenda? To consider issuing bonus shares in the ratio of 5:1 – meaning shareholders will receive five additional shares for every one share they hold.
This will be Gujarat Toolroom’s first-ever bonus issuance, marking a significant milestone in the company’s history. The decision, however, is subject to shareholder approval and the finalization of a record date.
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Why is this bonus issue important?
A 5:1 bonus issue can substantially increase the number of shares in circulation without requiring shareholders to invest additional capital. Essentially, companies issue bonus shares by capitalising on their reserves, reflecting financial strength and confidence in future growth.
According to BSE data, Gujarat Toolroom’s bonus share issuance will be a first for the company. This development aligns with the company’s broader strategy to enhance shareholder value and attract retail investors.
Recent strategic moves driving growth
Gujarat Toolroom has been on a transformative journey over the past few years. In March 2024, the company executed a stock split, reducing the face value of shares from ₹10 to ₹1. This move made shares more affordable and accessible to retail investors.
In October 2024, Gujarat Toolroom raised ₹50 crore through a Qualified Institutional Placement (QIP) at an issue price of ₹11.50 per share. This fundraising attracted institutional heavyweights like Zeta Global Funds and Eminence Global Fund PCC Trade Fund, highlighting growing investor confidence.
Additionally, the company raised ₹95.66 crore through another QIP in December 2024, issuing shares at ₹13.30 apiece. Notable investors included Bridge India Fund and Multitude Growth Funds Ltd., each acquiring a 7.75% stake.
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| Year | Event | Details |
| 1 Mar 2024 | Stock Split | Reduced face value from ₹10 to ₹1 |
| 1 Oct 2024 | QIP (Qualified Institutional Placement) | ₹50 crore at ₹11.50 per share |
| 1 Dec 2024 | QIP | ₹95.66 crore at ₹13.30 per share |
Stock performance and investor sentiment
Gujarat Toolroom’s share price has seen significant volatility over the past year. Although the stock is currently trading at ₹18.08, it remains 60% below its 52-week high of ₹45.97, recorded in March 2024. However, the stock has surged 60% from its 52-week low of ₹10.78, touched in August 2024.
Despite posting negative returns of over 54% in the past year, Gujarat Toolroom’s share price has skyrocketed by more than 1,200% over the last three years. This dramatic growth underscores the company’s strategic initiatives, including stock splits and successful QIPs, which have contributed to long-term shareholder value.
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| Time Period | Share Price Performance |
| 1 Year | -54.00% |
| 6 Months | 22.20% |
| 3 Months | 51.7% |
Financial performance: A closer look
Gujarat Toolroom’s financial performance has also been noteworthy. In Q2 FY2024, the company’s net profit soared by an impressive 1,016.25% to ₹26.79 crore, while net sales increased by 72.65% to ₹270.51 crore compared to the same period in 2023.
The company’s diversification into various trading sectors, including agriculture commodities, construction materials, and fabrics, has played a key role in driving revenue growth.
What’s next for Gujarat Toolroom?
The upcoming board meeting on January 6 could pave the way for Gujarat Toolroom’s first bonus issue, potentially boosting liquidity and attracting new investors. If approved, the bonus shares could further fuel the company’s growth trajectory by enhancing market participation.
Analysts and market experts suggest that the company’s consistent strategic moves, combined with strong financial performance, position Gujarat Toolroom as a compelling investment opportunity.
For investors, the key takeaway is clear – keep an eye on Gujarat Toolroom’s board meeting outcome, as it could unlock new growth avenues for the company and its shareholders.
