NBCC (India) Ltd is set to make a notable announcement as it prepares to trade ex-bonus, a significant milestone for its investors. The company has declared the issuance of 90 crore bonus shares in a 1:2 ratio, which means that for every two existing shares held by shareholders, they will receive one new fully paid-up equity share. This move has sparked considerable interest as the stock has displayed robust performance over the past year.
On the morning of October 7, NBCC’s share price witnessed a surge of over 4%, reaching Rs 117.32 on the National Stock Exchange (NSE). This increase is part of a broader upward trend, with the stock appreciating by 43% year-to-date and an impressive 103% in the last twelve months. In comparison, the Nifty index has shown more modest gains of about 15% and 28% for the same periods.
The bonus shares will be issued from the company’s strong free reserves, which stood at Rs 1,959 crore according to the audited financial statements for the fiscal year ending March 31, 2024. Eligible shareholders can expect these bonus shares to be credited within two months post-approval, with a target date set for October 31, 2024.
Investor Insights on NBCC Share Price
Investor sentiment towards this development is heightened by NBCC’s robust order book, which totals Rs 81,300 crore, along with a commendable book-to-bill ratio of 7.6x. Analysts from Nuvama highlight that the company’s strong order inflow combined with improved opportunities in real estate monetization contributes positively to its growth outlook. Notably, year-to-date order wins have reached Rs 19,800 crore, compared to Rs 23,500 crore for the entire fiscal year 2024.
Recent contract awards include a significant Rs 47 crore redevelopment project for SIDBI in Vashi and a consultancy order valued at Rs 101 crore for the construction of a new permanent office building for the National Highways Authority of India. These projects underscore NBCC’s active engagement in public sector initiatives and government projects, solidifying its position as a key player in the infrastructure sector.
Market Performance of NBCC Share Price
The overall market sentiment surrounding NBCC remains bullish, with the stock not only outperforming its peers but also demonstrating resilience amidst fluctuating market conditions. Analysts credit this growth to several essential factors:
- Strong Order Intake: The company has effectively secured substantial contracts, which bolster its revenue prospects.
- Opportunities in Real Estate: An ongoing buoyant realty cycle offers new avenues for growth and business expansion.
- Government Infrastructure Projects: A heightened focus on infrastructure development by the government is advantageous for NBCC’s operational strategies.
As of October 7, investors who owned shares before this date will qualify for the bonus issue. For instance, an investor holding 500 shares will receive an additional 250 bonus shares, significantly enhancing their investment in the company.
