Aastha Spintex Ltd. (NSE: AASTHA | BSE: 544808), which was listed on the stock exchanges earlier this month through its initial public offering (IPO), has informed the exchanges that its Board of Directors will meet on Thursday, July 23.
Shares of the recently listed textile company surged on Tuesday, hitting the 20% upper circuit after the market opened. The rally followed the company's announcement that its board will consider proposals for a bonus share issue and a final dividend.
According to the company's exchange filing, the Board of Directors will consider a proposal for a 1:1 bonus share issue for FY2025-26 and a final dividend of up to Rs 10 per equity share at its meeting on July 23. The proposals remain subject to the board's approval at the meeting.
If approved, the proposed bonus issue would entitle eligible shareholders to receive one additional bonus share for every one equity share held. The board will also consider a final dividend of up to Rs 10 per equity share. Following the announcement, investor interest increased, leading to buying activity in the stock. The company's shares had closed at Rs 108.20 in the previous trading session. On Tuesday, the stock opened at Rs 116 and rose to the 20% upper circuit level of Rs 129.80 shortly after trading began.
The company clarified that both the bonus share issue and the final dividend remain proposals, and a final decision will be taken only after the Board of Directors' meeting.
In its exchange filing, the company stated that the board will consider the final dividend proposal with the objective of sharing the company's success with shareholders. The company may utilize its reserves and surplus fund for this purpose. Bonus shares are generally issued to existing shareholders without any additional payment.
The company stated that while a bonus issue increases the total number of outstanding shares, it does not ordinarily result in an immediate change in the company's overall market capitalization. However, the adjustment in the per-share price may affect trading activity and liquidity.
Managing Director Divyang Jaswant Patel said the company aims to build a ber and more integrated textile business. He said the company considers this an appropriate time to strengthen its manufacturing capabilities and expand further across the textile value chain. According to the management, the proposed bonus issue and dividend reflect the company's commitment to sharing value with shareholders. The management also said that shareholders' trust has played an important role in the company's growth journey.
Following its listing on the NSE and BSE main boards, Aastha Spintex has also expanded its business through the acquisition of Falcon Yarns Private Limited. The company said the acquisition has increased its annual spinning capacity from 7,700 metric tonnes to 17,457 metric tonnes, while spindle capacity has increased from 25,920 to 61,824.
