Fri Sep 20 07:45:48 UTC 2024: ## RITES Shares Surge Despite Apparent Price Drop, Bonus Issue Sparks Confusion
**Mumbai, India -** Shares of RITES Ltd, the state-owned railway consultancy firm, surged on Friday despite an apparent 48% drop in price on trading apps. The confusion stemmed from the company’s 1:1 bonus share issue, which effectively halved the share price while simultaneously increasing the number of outstanding shares.
RITES shares opened at Rs 362.95 on Friday, down from Thursday’s closing price of Rs 682.45. However, this drop was entirely due to the price adjustment following the bonus issue. On an adjusted basis, the stock actually rose 8%, reaching an intra-day high of Rs 362.45.
The bonus issue, announced earlier this year, grants shareholders one additional share for every share held. While it increases liquidity by making shares more affordable, it also reduces the company’s reserves. This is not the first bonus issue for RITES, which also turned ex-bonus in August with a 1:4 ratio.
The company’s strong performance, reflected in a 46.17% increase in share price over the past year, and its shareholder-friendly approach have contributed to the positive momentum.
Despite the initial confusion, RITES continues to maintain its position as a leading player in the transport infrastructure sector, particularly in the railway industry. Shareholders are eligible for both the bonus shares and the Rs 5 dividend, with the latter expected to be paid by October 12.
Other companies turning ex-date for their bonus issues today included Phoenix Mills, Axita Cotton, MINDTECK (India), and Ujaas Energy. These stocks also saw upward momentum, with Axita Cotton surging 6.10% post its 1:3 bonus issue.
First Piper 