Samvardhana Motherson Automotive Systems, a part of Motherson Group, on August 16 said its board of directors has recommended the issue of bonus shares to its shareholders.

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The company said it will issue one bonus share for every two shares held by its existing shareholders, subject to approval. The bonus shares will be issued from securities premium account.

Before the bonus issue, the paid-up equity share capital of Samvardhana Motherson was Rs 451.76 crore. After the bonus issue, the paid-up equity share capital of the company would be Rs 677.64 crore.

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Samvardhana Motherson said the issue of bonus shares would be credited or dispatched within two months from the date of board approval i.e. by October 15, 2022.

Bonus share issues are usually used by companies to encourage retail participation. By increasing the number of outstanding shares, the stock price decreases, making it more affordable for retail investors.

The auto components major reported a consolidated net profit of Rs 367.65 crore from continuing operations in the first quarter ended June 30. The company had posted a consolidated net loss of Rs 1,121.60 crore from continuing operations in the same quarter last fiscal.

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Consolidated total revenue from continuing operations stood at Rs 16,157.35 crore during the quarter under review. It was at Rs 8,348.35 crore in the year-ago period.

Shares of Samvardhana Motherson ended at Rs 128.65, up by Rs 5.90, or 4.81 percent on the BSE.