Hindustan Petroleum Corporation Limited (HPCL) approved bonus issue of equity shares in the ratio of 2:1 at its board meeting on Wednesday.
The share flared on the stock exchanges on Thursday to hit a 52-week high of Rs. 1,233.25 apiece but later trimmed gains and was trading at Rs. 1,173, up 4.62 percent, at around 10.05 a.m.
In a regulatory filing to the Bombay Stock Exchange (BSE) after market hours, the state-run oil marketing company said the bonus issue would be subject to approval by its existing shareholders at the company's annual general meeting scheduled for September 8 this year.
"Hindustan Petroleum Corporation Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 20, 2016, inter alia, have considered and recommended Increase in Authorised Share Capital to Rs.2500 crores and further recommended Capitalisation of Reserves and issue of Fully paid bonus shares in the ratio of 2 (two) Bonus Equity Share of Rs. 10 each for every 1 (one) existing equity share of Rs. 10 each...," according to its regulatory filing.
The news had a positive effect on other state-run oil and gas companies, such as Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation (IOC) and Oil India Ltd.
BPCL was up 1.86 percent at Rs. 585.60 and IOC was trading 3.63 percent higher at Rs. 531.40. Oil India was also trading with gains of 1.25 percent at Rs. 377.
The Sensex was down 35 points at 27,880. Top Sensex losers were Axis Bank, Dr Reddy's Labs, Larsen & Toubro and TCS. Shares that were rallying on the 30-scrip benchmark index included Cipla, GAIL(India), ONGC, ITC and Wipro.
HDFC Bank shares were trading almost flat at Rs. 1,235.25. India's second-largest private sector lender will be declaring its first quarter results on Thursday.
Housing Development Finance Corporation (HDFC) recently raised Rs. 3,000 crore in masala bonds, or rupee-denominated bonds issued to overseas investors. The private sector mortgage lender became the first Indian entity to do so.