4:1 Bonus Shares: NBFC stock in focus after its board approves bonus issue

Synopsis: LKP Finance Limited announced a 4:1 bonus issue, granting four new Rs. 10 shares for every existing share held, boosting shareholders’ holdings proportionally without additional investment.

This NBFC Stock, engaged in private equity investments, stock broking, merchant banking, and portfolio management services, focuses on high-growth opportunities in Indian financial markets, jumped 4.98 Percent after the company’s board approves bonus issue of 4:1 shares.

With a market capitalization of Rs. 1,710.52 crores, the share of LKP Finance Limited has reached an intraday high of Rs. 1,151 per equity share, rising nearly 4.98 percent from its previous day’s close price of Rs. 1,096.40. Since then, the stock has retreated and is currently trading at Rs. 1,042 per equity share. 

Reason Behind the Surge

LKP Finance Limited’s Board of Directors has decided to issue bonus shares at a ratio of 4:1, meaning that shareholders will receive four new fully paid-up equity shares of Rs. 10 each for every one existing fully paid-up equity share they hold. 

For example, if a shareholder owns 1,000 shares of LKP Finance Limited, they will receive 4,000 bonus shares, bringing their total holding to 5,000 shares after the 4:1 bonus issue. 

LKP Finance Limited was established in 1984 as a private merchant financing entity in Mumbai and transformed into a public Non-Banking Financial Institution registered with the RBI. The company engages in private equity investments, merchant banking, stock broking, portfolio management services, and trading in shares, securities, and derivatives across Indian markets. 

The company holds SEBI Category-I merchant banker status, having served major clients like MRF, HDFC, and the Tata Group through issue management and capital market activities. Over decades, it restructured via demergers, spinning off forex operations to LKP Forex and broking to LKP Securities, while maintaining focus on high-growth financial opportunities, bill discounting, leasing, and hire-purchase without sharing financial data.

Recent Quarter Results

Coming into financial highlights, LKP Finance Limited’s revenue has decreased from Rs. 82.81 crore in FY24 to Rs. 7.42 crore in FY25, which is a drop of 91.04 percent. The net profit has also decreased by 81.27 percent from Rs. 55.06 crore in Q2 FY25 to Rs. 10.32 crore in Q2 FY26.

In terms of return ratios, the company’s ROCE and ROE stand at -0.83 percent and -0.17 percent, respectively. LKP Finance Limited has an earnings per share (EPS) of Rs. -5.37, and its debt-to-equity ratio is 0.06x.

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