Kansai Nerolac Paints shares trade ex-bonus; stock up 8%

Shares of Kansai Nerolac Paints jumped 8 per cent in Tuesday's trade, as they turned ex-bonus earlier today. Tuesday is also the record date for the bonus issue, meaning the board o the paints maker will ascertain the eligibility of members for issuance of bonus equity shares of the company. The company had announced bonus in the proportion of one new equity share for every two existing equity shares held by shareholders.

The stock rose 8.34 per cent to hit a high of Rs 333.50 on BSE. The stock has an average target price of Rs 468, as per data publicly available with Trendlyne, which suggests a 46 per cent potential upside.

A broad-based fall in crude oil prices is expected to provide a respite to paints maker, said Antique Stock Broking in its June quarter results preview. This brokerage expects Kansai Nerolac to report 200 basis points year-on-year expansion in gross margin for the quarter. For the quarter, prices of crude, HDPE, and TiO2 declined 26 per cent, 13 per cent and 12 per cent, respectively.

Kansai Nerolac Paints will announce its June quarter results on August 3. The company on June 30 said its board of directors have approved the proposal for sale of company's land at Kavesar, Thane admeasuring 96,180 square meters to Shoden Developers Private Limited, a group company of House of Hiranandani for Rs 655 crore.

The company had further informed that it had entered into an agreement to sell with the purchaser and the sale is subject to completion of procedures and approvals.

"With the completion of procedures and approvals as required for the sale, the board of directors has now approved the aforesaid sale transaction including the sale of additional area admeasuring 910 square meters, thus aggregating to a total area of 97,090 square meters together with the transfer of rights in land admeasuring 6,300 square meters at Kavesar, Thane, for a total consideration of Rs 671 crore to the purchaser. The company has entered into a Deed of Conveyance today, for the aforesaid transaction," Kansai Nerolac said.

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