The board of Motherson Sumi Wiring, the demerged entity of the erstwhile Motherson Sumi Systems Ltd. has approved a bonus issue of shares in the ratio of 2:5.

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Shareholders will receive two bonus shares of the company for every five shares that they own on the record date, which is yet to be decided. The company has also approved increasing the authorised share capital of the company to Rs 900 crore from Rs 333 crore.

Shares of the company are fluctuating between gains and losses, currently trading 1.1 percent higher at Rs 87.60, as of 3 PM. The stock had rallied as much as 7 percent on Wednesday when the company announced that it will consider the issue of bonus shares at its board meeting on Friday.

Motherson Sumi Wiring was formed when the domestic wiring harness business was demerged from Motherson Sumi Systems Ltd (MSSL). The demerger came into effect from January 5, 2022.

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Motherson Sumi Wiring India Ltd (MSWIL) listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in March this year. "Motherson Sumi Wiring India will continue to strengthen the capabilities further," MSWIL Chairman Vivek Chaand Sehgal had said in a statement.

The Noida-headquartered company is a leading player in the manufacturing of wiring harnesses, harness components, and other electric wires.

ICICI Securities initiated coverage on the stock with a "buy" recommendation and a price target of Rs 105. It expects compounded sales growth of 18 percent over the next three years.

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First Published:Sept 30, 2022 3:06 PM IST