On Friday, July 26, VST Industries’ stock price surged by as much as 7.41%, reaching an intraday high of Rs 4,290 per share. This rally followed the company’s announcement of a bonus issue for the first time.
In an exchange filing, VST Industries stated, “We hereby inform that the Board has recommended the issue of Bonus Shares in the ratio of 10:1, i.e., ten new bonus equity shares of Rs 10 each for every one existing equity share of Rs 10 each fully paid up, subject to the approval of Members at the ensuing 93rd Annual General Meeting of the Company.” This means shareholders will receive 10 bonus shares for every one share held as of the record date, following the company’s first-quarter results.
A bonus issue is an offer to existing shareholders to receive additional shares. Instead of increasing dividend payouts, companies distribute extra shares among shareholders. The Board has set Friday, August 30, 2024, as the record date to determine the eligibility of members to receive the bonus shares.
However, VST Industries also reported a 36% year-on-year (YoY) decline in net profit to Rs 53.6 crore. Its revenue fell by 3.5% YoY to Rs 321.3 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped by 30.4% YoY to Rs 73.3 crore, leading to an EBITDA margin contraction to 22.8% from 31.6% a year ago.
Founded in 1930 and headquartered in Hyderabad, VST Industries is a prominent Indian manufacturer of cigarettes and tobacco products, operating under various brand names such as Total, Charms, Charminar, Editions, Special, and Moments. It is the second-largest cigarette manufacturer in India. Originally known as the Vazir Sultan Tobacco Company, it was once affiliated with the British American Tobacco Group. VST Industries became an independent entity and was officially registered as VST Industries Ltd in 1983.
As of the latest data, VST Industries has a market capitalization of Rs 6,349.64 crore, according to the Bombay Stock Exchange (BSE). At 10:36 AM, shares of VST Industries were trading 2.96% higher at Rs 4,111.95 per share, while the BSE Sensex was trading 0.69% higher at 80,593.97 points.
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