1:2 stock split, two bonus issues: Multibagger SME IPO turns ₹1.2 lakh to ₹1.40 crore in seven years
Multibagger stock: A long term investor not just earn from stock movement only. A listed company shares its profit with its shareholders using its capital reserves. The listed companies reward its loyal investors by announcing dividend, bonus shares, stock split, rights issue, buyback of shares, etc.
In case of dividend, a shareholder of the company received the reward amount directly in one's bank account without booking any profit whereas in the case of bonus shares, stock split, etc. a shareholders shareholding increases and then movement in the stock gives him or her higher return on one's investment. To understand how bonus shares, stock split can reward a long term investor, we need to look at the journey of Lancer Container Lines since its IPO launch.
The public issue of this logistics service provider company was launched in March 2016 at a price band of ₹12 per share. A bidder was allowed to apply in lots and one log of this fixed price issue was comprising 10,000 company shares. This means minimum investment in this SME IPO was ₹1.20 lakh.
The public issue was proposed for listing on BSE SME exchange and the SME stock listed on BSE SME exchange at ₹12.60 per equity share, delivering around 5 per cent listing premium to its lucky allottees. However, for those allottees, who remained invested in this SME stock despite par listing, the company had much to offer in upcoming years. After par listing on BSE SME exchange, the SME stock declared bonus shares on two occasions.
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