The Hindu Business Line : Asian Paints plans bonus issue

DECORATIVE paints major Asian Paints informed the stock exchanges on Friday that its board of directors would consider issue of bonus shares when it meets on May 28. The company board would also review the financial results for the year ended March 31, 2003, and payment of final dividend, the company said in a notice to the Bombay Stock Exchange.

The Asian Paints stock flared up almost 17 per cent to hit the day's high of Rs 399 a share on expectation of a liberal bonus issue but pared gains in late trade to close at Rs 370 per share or 9 per cent higher than its previous close of Rs 340.45 per share.

Analysts said the company is expected to announce bonus in the ratio of 2-3 shares for every five shares held. The company had last issued bonus in year 2000 when it gave three shares for every five held.

According to a BSE filing, Asian Paints has an equity base of 6.4 crore shares of face value Rs 10 each of which about 46 per cent is held by the promoters and persons acting in concert. Foreign institutional investors have an 18.5 per cent stake in the company.

The company has already paid an interim dividend of Rs 4.50 per share or 45 per cent this year. Last fiscal, it paid a final dividend of Rs 5.50 per share or 55 per cent. Stock market analysts expect the company to maintain the dividend size this year too.

Asian Paints is the largest paint company in the country with projected cash flows of nearly Rs 250 crore for the year ended March 2003. An analyst with a local brokerage firm, who tracks the company closely, expects it to report a net profit of about Rs 140 crore for fiscal year 2003.

During the past year, Asian paints bought two companies in overseas markets - SCIB Chem of Egypt for Rs 25 crore and Berger International Holdings Ltd of Singapore for Rs 57 crore. The company is expected to generate about 5 per cent of its revenue from international operations.

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