Axita Cotton Limited has announced a bonus issue that will reward existing shareholders with additional equity shares. The BSE-listed textile manufacturer has set specific timelines and ratios for this corporate action, which reflects the company's strong reserve position and sound balance sheet.

Bonus Issue Record Date and Ratio

The company has established February 13, 2026, as the record date to determine eligible shareholders for the bonus equity share issuance. According to the regulatory filing, shareholders will receive bonus shares in the proportion of 1:10, meaning 1 bonus equity share of Re. 1/- each for every 10 existing equity shares of Re. 1/- each held as on the record date. This bonus issue remains subject to shareholder approval.

Board Recommendation and Timeline

At the Board of Directors meeting held on January 5, 2026, the directors formally recommended the bonus equity share issuance in the 1:10 ratio. The company has provided a clear timeline for the bonus share distribution, with an estimated completion date on or before March 4, 2026, which falls within 2 months from the Board Meeting date.

Financial Impact and Capital Structure

The bonus issue will significantly impact Axita Cotton's capital structure and share count:

Reserve Utilization

Axita Cotton will capitalize free reserves of up to ₹3.47 crore to execute this bonus issue. The company demonstrates a robust financial position with free reserves of ₹28.02 crore as per its audited financial results for the year ending March 31, 2025. This substantial reserve base indicates the company's strong financial health and ability to reward shareholders through bonus share distribution.

Technical Analysis Perspective

According to A R Ramachandran, a part-time SEBI-registered Research Analyst at Tips2trades, the stock exhibits bearish sentiment with strong resistance at ₹10.84 on daily charts. The analysis suggests that a daily close below the support level of ₹9.70 could potentially lead to a target of ₹8.20 in the near term.

The bonus issue represents Axita Cotton's commitment to sharing value with existing shareholders while maintaining its capital structure efficiency. Eligible shareholders should ensure their holdings are properly recorded as of the February 13, 2026 record date to benefit from this corporate action.

Axita Cotton Limited has officially initiated the postal ballot process for its proposed 1:10 bonus equity share issuance, with e-voting commencing January 8, 2026. The company has set February 13, 2026, as the record date for the bonus issue, following its strong Q3FY26 financial turnaround that showed net profit of ₹259.58 lakhs compared to a loss of ₹122.04 lakhs in the corresponding quarter.

E-Voting Schedule and Process

The company has engaged National Securities Depository Limited (NSDL) to facilitate remote e-voting for shareholder approval. The postal ballot notice dated January 5, 2026, seeks consent for the bonus share issuance through ordinary resolution.

Q3FY26 Financial Performance

The company's quarterly results demonstrated significant profitability improvement despite revenue decline. Revenue from operations decreased to ₹8,939.85 lakhs in Q3FY26 from ₹22,803.80 lakhs in Q3FY25, while achieving complete turnaround in profitability.

Bonus Issue Structure and Capital Impact

The proposed bonus issue will be funded through capitalization of free reserves available as per audited financial statements. Shareholders holding equity shares as on February 13, 2026, will be eligible to receive bonus shares in the ratio of 1:10.

Regulatory Compliance and Shareholder Eligibility

The postal ballot notice has been sent electronically to shareholders whose email addresses are registered with the company's Registrar and Share Transfer Agent, MUFG Intime India Private Limited, and depositories NSDL and CDSL. The company maintains free reserves of ₹28.03 crores, sufficient to cover the required amount for the bonus issue.

Nine-Month Performance Highlights

For the nine-month period ended December 31, 2025, the company demonstrated consistent growth in profitability with net profit increasing to ₹424.37 lakhs from ₹295.04 lakhs in the corresponding period.