RITES shares: Why the railway PSU stock might be showing 48% slide today

Shares of RITES Ltd turned ex-date for bonus issue on Friday morning, leading to adjustments in its share price. The PSU railway stock opened at Rs 362.95 and soon hit a low of Rs 354.55 today, which was 48 per cent lower than Thursday's closing price of Rs 682.45 for the stock. On adjusted basis, however, the railway PSU stock later advanced, climbing 8 per cent to hit a high of Rs 362.45 on BSE.

Investors, who might be seeing a 48 per cent fall in Rites shares on their trading apps could, thus, be seeing the unadjusted Rites price.

A bonus issue increases number of outstanding equity shares and reduces share price of the stock in proportion to number of bonus shares issued. It improves liquidity on the counter, but reduces free reserves and surplus of the company.

Others such as The Phoenix Mills Ltd and Axita Cotton also climbed up to 6 per cent post similar corporate actions. Shares of Ujaas Energy Ltd, IFL Enterprises and MINDTECK (INDIA) Ltd also turned ex-date for bonus today.

In the case of Rites, the railway PSU had announced a bonus issue ratio of 1:1, which means shareholders holding one share of Rites will get one share and the eligibility of the shareholders will be determined today, which is also the record date for the corporate action. Rites also went ex-dividend today. The PSU had announced a final dividend of Rs 5 per share for FY24. The actual dividend will be paid on October 12.

The PSU had in August 2024 turned ex-bonus in the 1:4 ratio, data available with stock exchanges showed.

Rites is a multi-disciplinary engineering and consultancy organisation, offering diversified services from concept to commissioning of transport infrastructure and related technologies. It has significant presence as a transport infrastructure consultancy organisation in the railway sector.

Meanwhile, Realtor Phoenix Mills also turned ex-date for 1:1 bonus issue today. This stock was trading 1.09 per cent higher at Rs 1,782.10. Axita Cotton soared 6.10 per cent to Rs 17.22. This stock turned ex-bonus in 1:3 ratio. MINDTECK (INDIA), IFL Enterprises Ltd and Ujaas Energy shares also turned ex-date for bonus today.