LKP Finance Ltd has announced major corporate restructuring moves following its board meeting, with the stock delivering exceptional returns of 408% over the last 12 months. The Mumbai-based financial services company approved a generous 4:1 bonus share issue alongside a substantial increase in authorized share capital, reflecting strong investor confidence and market performance.

Outstanding Stock Performance and Market Response

The company has emerged as a multibagger stock, surging 408% over the last 12 months and gaining 116% in the past six months. This exceptional performance reflects strong investor interest and renewed confidence in financial sector stocks, particularly smaller finance companies.

Board Resolutions and Key Approvals

The board meeting resulted in several important decisions requiring shareholder approval. The directors approved the increase of authorized share capital from ₹30.00 crores to ₹110.00 crores, representing a substantial expansion of the company's capital structure. The board also sanctioned a postal ballot process for obtaining necessary shareholder approvals.

Bonus Issue Structure and Timeline

The approved bonus issue follows a 4:1 ratio, meaning eligible shareholders will receive four new fully paid-up equity shares of face value ₹10.00 each for every existing share held. The bonus shares will be funded through capitalization of the Securities Premium Account.

Capital Structure Transformation

The bonus issue will significantly alter LKP Finance's capital structure, with the paid-up capital expanding five-fold from current levels, improving stock liquidity and broadening the investor base.

Company Background and Market Position

LKP Finance operates as part of the Mumbai-based LKP Group, a diversified financial services group with interests spanning broking, capital markets, investment banking, financing and advisory services. The company functions as a non-banking financial company (NBFC), focusing on lending and investment activities, while benefiting from the broader group's presence in equity broking and market intermediation.

The company possesses adequate financial resources with a share premium balance of ₹1,26,59,35,122.00, comfortably covering the bonus implementation requirements. All proposed actions remain subject to shareholder approval through the upcoming postal ballot process, with regulatory compliance maintained under SEBI guidelines.

LKP Finance Limited has announced a significant corporate development with the approval of a bonus share issue in the ratio of 4:1. This decision will provide substantial benefits to the company's existing shareholders through additional equity allocation.

Bonus Issue Details

The approved bonus issue structure offers favorable terms for current investors:

Impact on Shareholders

Under this bonus issue arrangement, shareholders will receive four additional shares for every one share they currently own. This corporate action effectively increases the total number of shares outstanding while maintaining the proportional ownership structure for existing investors.

The 4:1 ratio represents a substantial bonus allocation, significantly expanding the share base of LKP Finance Limited. Shareholders will benefit from increased liquidity and enhanced marketability of their holdings following the implementation of this bonus issue.

Corporate Action Significance

Bonus issues typically reflect a company's confidence in its financial position and future prospects. By approving this 4:1 bonus share issue, LKP Finance Limited demonstrates its commitment to rewarding shareholders while restructuring its capital base.

The approval of this bonus issue marks an important milestone for the finance company and its investor community, providing enhanced value proposition through increased share allocation.