Bajaj Auto mulls bonus after 13 yrs

Bajaj Auto will consider a bonus issue at its board meeting on July 22, the first time in 13 years. Following the announcement, Bajaj Auto’s shares touched a high of Rs 2,525 on an intra-day basis on the BSE, after opening at Rs 2,415 Wednesday. No other details of the issue were announced.

According to information available on the official website, the last time Bajaj Auto Ltd (now known as Bajaj Holdings and Investments Ltd) had made an announcement of the sort was in October 1997, when it issued bonus shares in the ratio of 1:2. This will be the company’s ninth bonus issue since its inception. Five of the previous bonus issues have been in the ratio of 1:1, in 1994, 1991, 1988, 1984 and 1976. The highest ever was 1:5, issued in the 60s. Bajaj Auto will hold its AGM on the same day to obtain shareholders’ nod for the issue.

Bajaj Auto has already recommended a 400% dividend of Rs 40 per share for 2009-10, riding on its highest numbers in its history after it sold 2.85 million units in FY10. BAL's forecast for FY 11 is to touch four million sales, with one million coming from exports. The company ended year 2009-10 with a total income of Rs 12,043.4 crore and net profit of Rs 1,700 crore. Bajaj’s EPS in 2009-10 was at 117.70. Bajaj Auto has been outperforming the Sensex and the auto index since April 2009.
Recently, clarifying on plans to launch an ultra-low cost car with French giant Renault, the company said both can fulfil their “mutual objective” through a simple original equipment manufacturer arrangement.