Board Approves 100% Bonus Share Issue and Capital Boost

The company plans to issue bonus shares worth ₹23.57 crore and increase authorized capital to ₹50 crore.

The Announcement

The Board of Directors at Mini Diamonds (India) Ltd has approved a 100% bonus share issue. This means shareholders will receive one new bonus share for every share they currently own.

This proposal, valued at ₹23.57 crore, will be funded from the company's existing reserves and surplus. Mini Diamonds held free reserves of ₹39.20 crore as of March 31, 2025, providing ample backing for this issuance.

Alongside the bonus share plan, the company proposed to increase its authorized share capital from ₹30 crore to ₹50 crore. This expansion of the capital base could support future growth plans or strategic adjustments.

Both proposals require shareholder approval, which will be sought through a postal ballot. The estimated dispatch of bonus shares is targeted for on or before June 21, 2026.

Strategic Rationale and Shareholder Benefit

A bonus issue allows existing shareholders to increase their stake without additional investment, potentially enhancing their overall holding value. Such issuances often reflect a company's confidence in its financial health and future prospects, underpinned by strong retained earnings.

The planned increase in authorized share capital provides Mini Diamonds with greater flexibility for future fundraising, expansions, or strategic initiatives without needing immediate shareholder approval for capital ceiling adjustments.

Company Background and Financial Strength

Mini Diamonds (India) Ltd, incorporated in 1987, operates in the diamond and jewellery sector, involved in manufacturing and trading. The company has historically aimed to expand its capacities and has shown robust financial performance recently.

Over the last three years, Mini Diamonds has achieved a Profit After Tax (PAT) CAGR of approximately 152.47% and revenue growth of about 65.15% in FY25. The company is also virtually debt-free, demonstrating a strong balance sheet.

What Shareholders Can Expect

• Shareholders who own shares before the record date will receive additional shares, effectively doubling their holdings.
• The company's issued share capital will increase, reflecting a larger equity base.
• The expanded authorized capital will provide greater financial flexibility for the company's future operations.

Key Risks Ahead

• The primary risk is the failure to obtain shareholder approval through the upcoming postal ballot. Without this consent, both the bonus issue and the capital increase will not proceed.
• The timing of the bonus share dispatch is contingent on all necessary approvals and regulatory processes being completed smoothly.

Industry Context

Mini Diamonds operates in the competitive Indian diamond and jewellery sector, alongside players like Titan Company, Kalyan Jewellers India, and Thangamayil Jewellery. This industry is projected for growth, with the organized retail segment expected to expand significantly. The increasing demand for lab-grown diamonds also presents new avenues for companies in this space.

Key Financial Metrics

• Free Reserves: ₹39.20 crore (as of March 31, 2025, Standalone).
• Authorized Share Capital (Proposed): ₹50 crore (from ₹30 crore).
• Value of Bonus Shares: ₹23.57 crore.

What to Monitor Next

• Outcome of the postal ballot for shareholder approval of the bonus issue and capital hike.
• Announcement of the Record Date, which determines eligible shareholders for the bonus shares.
• The actual dispatch of bonus shares to eligible demat accounts by the stipulated deadline.