Shakti Pumps (India) Ltd (SPIL), a leading manufacturer of solar pumps, submersible pumps, booster pumps, and other components for solar setups, saw its shares hit a 5% upper circuit limit today. This strong movement came even as the broader market faced significant pressure, with the Sensex and Nifty both dropping over 1% and India VIX, a measure of market volatility, spiking by nearly 7%. So, what has driven this rally amid an otherwise tumultuous day in the market?
The rally in Shakti Pumps’ stock came on the back of an exciting corporate announcement. The company disclosed that it would hold a board meeting on Monday, October 7, 2024, to discuss the issuance of bonus shares. According to the filing, the board will consider a 5:1 bonus issue, which means every existing shareholder will receive five additional shares for each share they currently hold.
This proposal, however, will need approval from the shareholders, and the company has yet to announce the record date for this corporate action. Despite this pending approval, the news has ignited significant buying interest, pushing the stock to an upper circuit amidst an otherwise bleak day for the market.
It’s not just today’s bonus issue announcement that has put Shakti Pumps in the spotlight. The stock has been on a tear this year, quadrupling investor wealth with an incredible 310% rise year-to-date. SPIL has clearly captured the attention of both retail and institutional investors, driven by its focus on solar energy solutions and government-backed initiatives for rural electrification.
Shakti Pumps is a key player in the renewable energy sector, catering predominantly to government orders focused on solar-powered irrigation for farmers. The company also supplies its pumps for residential and industrial use. With three manufacturing facilities located in Madhya Pradesh, SPIL has an impressive installed capacity of 0.8 million units per annum, ensuring it can meet both domestic and international demand.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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