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CDSL announced August 24 as the record date for a 1:1 bonus share issuance, its first-ever. In Q4, the company reported a 52% growth in consolidated net profit compared to the previous year. In the last 6 months, CDSL shares gained 38.72%.
Central Depository Services (India) Ltd. (CDSL) has announced August 24 as the record date for its first-ever bonus share issuance. This is a significant move for the depository services provider. Investors will be closely watching CDSL’s share price today.
The bonus shares will be issued by capitalising the company’s free reserves, including general reserves and retained earnings. This is CDSL's first instance of considering a bonus share issue to shareholders. Bonus shares are issued at no additional cost to shareholders, hence also referred to as "free shares."
By issuing bonus shares, CDSL aims to capitalise on its free reserves, increase its Earnings Per Share (EPS), and boost paid-up capital while reducing reserves. This strategy is intended to reward shareholders and strengthen the company's equity base.
The decision to issue bonus shares follows a robust financial performance in the last fiscal year. CDSL reported a 52% increase in consolidated net profit for FY2023, with the profit doubling to ₹129 crore in the March quarter alone. The company’s total income for the quarter surged by 86% year-on-year to ₹267 crore. For the entire fiscal year, total income saw a 46% growth.
CDSL's share price reflected its strong financial performance, closing 4.6% higher at ₹2,566.15 apiece on Friday, August 7. The stock has gained 38.72% over the last six months and has appreciated by 41.13% in 2024 so far.
CDSL’s decision to issue bonus shares is a strategic move to capitalise on its strong financial reserves while rewarding shareholders. The record date of August 24 marks an important milestone for the company, aligning with its impressive financial growth and stock performance.
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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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