Shares of RITES Ltd experienced a 12% surge during its ex-dividend and ex-bonus trading day today, September 20, 2024. The company had previously announced a 1:1 bonus share issue, meaning shareholders would receive one bonus share for every share they owned. Additionally, shareholders are entitled to a ₹5 dividend per share, making RITES an attractive option for those involved in share market investment.
RITES’ performance on ex-dividend day
On the ex-dividend and ex-bonus trading day, the RITES stock saw increased buying interest as investors wanted to qualify for the bonus issue and dividend payout. The stock reached a high of ₹384 on NSE, reflecting a 12% jump. However, after the adjustment, the stock was trading at ₹363.05, reflecting the proportional decrease in the stock price due to the bonus share issue. These fluctuations provide an opportunity for investors interested in share market investment to capitalise on RITES' potential.
What is a bonus issue?
A bonus issue increases the number of shares outstanding by distributing additional shares to existing shareholders. This practice reduces the share price proportionally, making it more affordable for retail investors and increasing liquidity in the market. For investors focusing on share market investment, bonus issues can be an excellent strategy to accumulate more shares without having to buy additional stock at market prices. In RITES' case, the 1:1 ratio doubles the number of shares owned by current shareholders.
Why RITES stock is gaining attention?
RITES has attracted significant attention recently, not just because of its bonus and dividend but also due to new partnerships and contracts. Earlier this month, RITES signed a memorandum of understanding (MoU) with NBCC (India) Ltd, aiming to collaborate on various consultancy and project management services.
Additionally, the company emerged as the lowest bidder for a ₹60.03 crore consultancy services tender in Uttar Pradesh. These developments highlight the company’s growth prospects, making it an appealing option for those engaged in share market investment.
Invest safely
RITES' 12% stock surge during its ex-dividend and ex-bonus trading day signals positive investor sentiment and the potential for continued growth. For those involved in share market investment, this stock offers both short-term and long-term gains through dividends, bonus shares, and strong business developments.
With its recent partnerships and successful tenders, RITES is a company to watch in the infrastructure and consultancy space. Investors seeking opportunities in this sector should consider how bonus issues and dividend payouts can enhance their investment portfolio.
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