Shares of home appliances maker Blue Star snapped a three-day losing streak after the company's board announced an issue of bonus shares in the ratio of 1:1.

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This means that the company will issue one equity share for every one share held by an eligible shareholder as of the record date.

The company will seek shareholders' approval for the bonus share issue. The record date shall be decided by the Board post approval of the shareholders through postal ballot, according to an exchange filing.

Blue Star previously had announced a bonus share issue in 1995.

Companies usually announce bonus share issues to increase retail participation in the stock and increase the equity base. The bonus share issue is also an alternative to a cash dividend and reflects the financial health of a company.

“Overall, in FY23, with a record all-round performance, the company has reinvented itself once again, and is on a high growth path. The company has adequate accumulated reserves,” Blue Star stated.

The board also recommended a dividend of Rs 12 per equity share of face value Rs 2 each. As and when the bonus issue is approved, the dividend post bonus will stand revised as Rs 6 per equity share of face value Rs 2 each.

Blue Star reported a net profit of Rs 225.29 crore for the quarter ended in March 2023 compared to Rs 76.27 crores in the same quarter a year ago, largely driven by exceptional gains of Rs 170.81 crore from the sale of a land parcel in Thane, Maharashtra.

The company’s revenue from operations increased by 16.4 percent to Rs 2,623.83 crores for the quarter ended March 31, 2023, compared to Rs 2,254.21 crore during the same period in the previous year.

Shares of Blue Star are off the day's high, currently trading 0.9 percent higher at Rs 1,449.60.