Organic Recycling Systems Ltd. has proposed a bonus issue of equity shares in a 1:2 ratio. This move, subject to shareholder approval, aims to increase outstanding shares and liquidity, funded by reserves.
Organic Recycling Systems Proposes 1:2 Bonus Issue
Organic Recycling Systems Ltd. announced that its Board of Directors has recommended the issuance of bonus equity shares. The proposed ratio is 1 bonus share for every 2 existing shares.
What just happened
The company plans to issue 51,99,637 new equity shares. The bonus issue is set to be funded by capitalizing ₹5.19 crore from the company's share premium and/or capital redemption reserve. The expected credit date for these shares is on or before September 3, 2026.
Why this matters
For shareholders, a bonus issue effectively increases their holdings without additional cost. It also typically leads to greater liquidity for the company's stock in the market. The company stated it has sufficient reserves, with available reserves of ₹151.95 crore as of March 31, 2026, to support this corporate action.
The backstory
The pre-bonus equity capital of Organic Recycling Systems Ltd. stands at ₹10.39 crore. Following the proposed bonus issue, the post-bonus equity capital is expected to rise to ₹15.59 crore. The company's substantial free reserves provide a strong foundation for this capitalization.
What changes now
Shareholders eligible on the yet-to-be-announced record date will receive additional shares. The stock price will adjust downwards on the ex-bonus date to reflect the increased number of shares. The face value of each equity share is ₹10.
Risks to watch
Investors must await the announcement of the record date to determine eligibility. The bonus issue is contingent upon receiving necessary shareholder and regulatory approvals. Share price adjustments post-bonus can impact short-term valuations.
Context metrics (time-bound)
Available Reserves (as of March 31, 2026): ₹151.95 crore.
Expected Credit Date: On or before September 3, 2026.
What to track next
Shareholders should monitor announcements regarding the record date for bonus share eligibility and the final approval status of the bonus issue.