UP Hotels Bonus Issue - Non Promoters Only- Ratio 31 :20

Non Promoter Public Share holders of UP Hotels get a bonanza . Only for them  Bonus Issue in the ratio of 31 bonus  shares for every 20 held.

http://www.moneycontrol.com/news/announcements/up-hotels-updatesratiobonus-shares_883905.html

Does this mean that UP Hotels has dropped its earlier plans to Delist.

A Dividend of 50 % has been declared for 2012-13

UP Hotels owns the chain of famous Clark Group of Hotels .

http://www.rareindianshares.info/2009/09/u-p-hotels-limited.html

http://www.hotelclarks.com/

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Bonus Shares For Non Promoters Only - What Would Be Ex - Bonus Price ?

In case of normal Bonus Issues , the Ex Bonus Rate falls Proportionately

Example : Balmer Lawrie and Company

Pre Bonus Rate Rs. 700

Bonus in the Ratio of 3 : 4

4 shares become 7

Ex Bonus Rate 4 x 700 = 2800 , divided by 7 = Rs. 400

But , these days a new development has taken place . Some Companies , to comply with Minimum 25% Public Holding Directive of SEBI  ,are issuing Bonus shares only to their Non Promoters 

Example 

UP Hotels 

Bonus Ratio : 31 Bonus Shares For 20 Held

http://www.rareindianshares.info/2013/05/up-hotels-bonus-issue-non-promoters.html

Here , around 12 %  shares are held by the Non Promoters

http://www.rareindianshares.info/2009/09/u-p-hotels-limited.html

                          or

Ras Resorts

Bonus Ratio 

1 : 5 ( Please Recheck )

http://www.moneycontrol.com/india/stockpricequote/hotels/rasresortsaparthotels/RRA


Q -WHAT WOULD BE THE EX BONUS RATES IN SUCH LIKE CASES OF LIMITED BONUS ISSUES ??

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Answer  By Bhavikk Shah

As for the bonus to non-promoters are concern- the equation remains the same that is -

At present UP HOTELS CMP is Rs. 353.90 per share . It declared bonus of 31 new for every 20 held - so after bonus the price FOR INDIVIDUAL INVESTOR should be Rs.138.78/share.
(CMP Rs.353.90 x 20 all ready held = Rs.7078; Bonus of 31 new so your total investment of Rs. 7078 remains the same but the total number of shares increase to 51 shares , so Rs. 7078/51 = Rs.138.78/sh)

Now, for promoters -
Company has total of 54,00,000 shares - promoters hold 88.39% or 47,72,960 shares.

NOW - AFTER BONUS -
Co's 54,00,000 shares will become 63,71,912 shares (Total shares 54,00,000; bonus to non promoter so minus the promoter holding of 47,72,960 from this 54,00,000 = 6,27,040 shares;Bonus is of 31 new for 20 held so- 6,27,040 divide by 20 already held will give you 31,352 shares multiply this by 31 new shares will give you 9,71,912 new shares ; Add this 9,71,912 with 54,00,000 will give you 63,71,912 shares)-
now, promoters will not be getting Bonus so their holdings remains same at 47,72,960 shares but their percentage will be reduced from 88.39% to 74.90% a reduction of dot 13.49% in promoters holding. This is also one kind of dilution.

BUT this promoter dilution will impact the market cap and co's MCAP before bonus is 54,00,000 Shares X CMP of Rs.353.90 = Rs.191,10,60,000 Cr
Now divide this 191 Cr with new Total shares = Rs. 191,10,60,000 / new total shares of 63,71,912 = Rs. 299.91
I think UP HOTELS should trade near Rs.300 after bonus.

DO SHARE YOU VIEWS -
THANKING YOU TO GIVE ME AN OPPORTUNITY TO EXPRESS MY SELF

REGARDS
BHAVIKK SHAH
CLICK FOR BHAVIKK SHAH's BLOG ALSO ON
STOCKMUSINGS.COM

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Blog 's extreme gratitude to Bhavikk Shah for his brilliant analysis.

General Warning : Investment in Shares Can be Injurious to Your  WEALTH

Caution :The blog writer has personal/ family members' holdings in this Company , so please make suitable "provisions " for likely over optimism

( NB : All information given in good faith. Please recheck all facts. No responsibility taken by this author / blog . )

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