This Small Cap Software Co. Fixed Record Date For 1:3 Bonus Share Issue: Check Details

Bonus shares are the additional shares shareholders are allotted in proportion of their holdings in the company coming up with the bonus share issue. These are issued for free to investors out of the company’s free reserves and surplus. This surplus is moved to the capital and from here bonus shares are issued.

Usually as and when the company decides on the eligibility of shareholders in respect of the bonus share issue based on the record date, ISIN for fresh shares is issued and it takes no longer then 15 days time from the record date for bonus shares to be credited in eligible shareholders’ account.

So, likewise, here Sonata Software has in a filing to the exchange informed that it has fixed September 9, 2022 as record date for ascertaining eligible shareholders for issue of bonus shares in the ratio of 1:3 i.e. one bonus share of Rs. 1 each for every three shares
held by the shareholder subject to approval of members.

This hence means eligible shareholders who hold the company’s scrip in their demat as on the record date shall get the additional bonus shares latest by September end.

Sonata Software is a small cap software sector entity offering IT services (30%) and product licensing & deployment (70%). The company provides IT services to travel, retail, agri & commodities and manufacturing and software vendors The company is Net debt free and commands healthy double digit return ratio (with RoCE of >30%)

The stock’s 3-year return is at over 134%, while in the last 1-year it has given negative returns.

In July end, ICICI Direct gave a ‘Hold’ rating on the stock for the target price of Rs. 770 per share. The company’s scrip last traded at Rs. 718.95 apiece on the NSE.

The brokerage in its reported highlighted 3 of the trigger for future stock performance:

Strong digital capabilities helping it for accelerated digital revenue growthenhancing digital revenue mix. i.e 73% of mix now vs 68% a year ago

Upgrades in Microsoft Dynamics and tapping fortune 1000 clients in the medium to large category bode well for revenue growth

Robust hiring trend & inorganic growth prompt us to build IT service dollar revenue growth of over 18.5% CAGR over FY22-24E.