5:2 bonus shares: Multibagger SME IPO turns ₹1.44 lakh to ₹25.20 lakh in five years

livemint.com:

Multibagger IPO: The initial public offerings (IPO) of Iris Clothings Ltd was launched in October 2018 and the fixed price issue was proposed for listing on NSE SME exchange. the public offer was offered at ₹90 apiece and one lot of the NSE SME IPO comprised 1,600 company shares. The SME stock had a muted debut on NSE SNE exchange as the stock listed at ₹92 per share levels, delivering ₹2 per share listing gain to its allottees.

However, those investors who remained invested in the stock backing their conviction, they went on to get whopping return from the small-cap stock. The SME stock is current trading around ₹450 apiece levels, which is 400 per cent higher from its issue price. But, this is not the return that a lucky allottee would have earned, if he or she had remained invested in this small-cap SME stock.

After tepid listing on NSE SME exchange, the small-cap stock declared one bonus share. The SME company declared issuance of bonus shares in 5:2 ratio. The bonus share traded ex-bonus on 15th October 2020 for issuance of five bonus shares for every two company shares an eligible shareholder held on the record date.

If an allottee of Iris Clothings IPO had remained invested in this SME stock after listing, its shareholding would have surged to 3.5 times [(5 + 2) / 2]. As lot size of the IPO was 1,600, an allottee who remained invested in the scrip till bonus share record date, its shareholding in the sock would have surged to 5,600 (1,600 x 3.5). As the IPO was offered at ₹90 apiece and one lot of the SME IPO comprised 1,600 shares.