Penny Stock Below Rs 150: This Small-Cap Infrastructure Stock Approves 1:1 Bonus Issue; Authorised Share Capital to Double

On Thursday, Indian equity benchmark indices traded marginally higher, with the benchmark Nifty 50 index gaining 11.35 points, or 0.05 per cent, to 24,636.00. Amid the positive market sentiment, Chavda Infra share price declined 0.63 per cent to Rs 133.45 after the company's board approved a 1:1 Bonus issue, proposed doubling its authorised share capital, and announced that it would retain profits instead of declaring a Dividend.

Board Approves 1:1 Bonus Issue

The Board of Directors of Chavda Infra Limited approved and recommended the issuance of bonus equity shares in the ratio of 1:1, entitling shareholders to one fully paid-up bonus equity share of face value Rs 10 each for every one existing fully paid-up equity share of Rs 10 each held on the record date. The proposal is subject to shareholders' approval and other applicable statutory and regulatory approvals.

The company plans to issue 3,26,56,000 bonus equity shares, with no fractional shares being issued. The bonus shares will be issued by capitalising the company's Share Premium Reserve, Free Reserves and Retained Earnings available as on March 31, 2026, and are expected to be credited or dispatched within 60 days from the date of board approval.

Authorised Share Capital to Double

To facilitate the proposed bonus issue and support future fund-raising plans, the board approved increasing the company's authorised share capital from Rs 35 crore to Rs 70 crore, subject to shareholders' approval. Consequently, the authorised equity share capital will increase from 3.50 crore equity shares of Rs 10 each to 7 crore equity shares of Rs 10 each through an amendment to Clause V of the Memorandum of Association.
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Share Capital After Bonus Issue

The company's pre-bonus paid-up share capital stands at Rs 32.66 crore, comprising 3,26,56,000 equity shares of Rs 10 each. Following the proposed bonus issue, the paid-up share capital is expected to increase to approximately Rs 65.31 crore, comprising 6,53,12,000 equity shares of Rs 10 each. The company will utilise Rs 32.66 crore from its reserves for implementing the bonus issue, while it had Rs 187.84 crore of Share Premium Reserve, Free Reserves and Retained Earnings as of March 31, 2026.

Chavda Infra No Dividend Declared

The Board also considered the proposal for the declaration of a dividend but decided to retain the profits to further strengthen the company's financial position and reserves. According to the company, the decision is aimed at enhancing financial flexibility to support future business growth, expansion opportunities and long-term value creation for shareholders.

The board further approved the draft notice for conducting a postal ballot to seek shareholders' approval for the proposed increase in authorised share capital and the bonus issue.

About Chavda Infra

Chavda Infra Ltd is an infrastructure and Construction company engaged in executing residential, commercial and institutional building projects. The company undertakes end-to-end construction services and has executed projects across both the public and private sectors.

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Disclaimer: The article is for informational purposes only and not investment advice.