A-1 Ltd Board to Consider 5:1 Bonus Issue, 1:10 Stock Split, and EV Diversification

A-1 Ltd's board will convene on November 14 to review several shareholder-friendly proposals. These include a 5-for-1 bonus issue, where shareholders will receive five new shares for every one they hold. Additionally, the company proposes a stock split of existing equity shares, dividing one share into up to ten, which aims to increase liquidity and affordability. A dividend of up to 50% on paid-up equity share capital is also on the agenda.

The Ahmedabad-based company, currently involved in logistics and chemical trading, is making a significant strategic shift towards clean mobility. It plans to expand its subsidiary, A-1 Sureja Industries, into new electric vehicle (EV) and allied clean mobility sectors. This expansion will cover research and development, battery technology, EV component manufacturing, and smart charging infrastructure.

A-1 Sureja Industries is already engaged in manufacturing electric two-wheelers and has an enterprise value of ₹200 crore. A-1 Ltd recently increased its stake in this subsidiary to 51% from 45%.

Impact These corporate actions can boost investor confidence and share liquidity. The ambitious EV diversification signals a move into a high-growth sector, potentially unlocking new revenue streams and increasing the company's valuation, provided the expansion is executed successfully. The move to EVs is strategic for long-term growth. Rating: 7/10

Difficult Terms Bonus Issue: A distribution of additional shares to existing shareholders, issued free of charge, in proportion to their current holdings. It aims to increase the number of shares outstanding and make them more affordable. Stock Split: A decision by a company to increase the number of its outstanding shares by dividing each share into multiple shares. This typically lowers the stock's trading price per share, making it more accessible to smaller investors. Dividend: A distribution of a portion of a company's earnings to its shareholders, decided by the board of directors. Subsidiary: A company controlled by a parent company, usually through ownership of more than 50% of its voting stock. Electric Vehicle (EV): A vehicle that uses one or more electric motors for propulsion, powered by rechargeable batteries. Clean Mobility: Sustainable transportation solutions that aim to reduce environmental impact, often focusing on electric power, hydrogen, or efficient public transit. R&D: Research and Development, activities undertaken by companies to innovate and introduce new products and services, or to improve existing ones. Enterprise Value (EV): A measure of a company's total value, often calculated as market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents. In this context, it refers to the valuation of the subsidiary.