Indian Oil Corporation (IOCL) shares surged nearly 5 per cent on Wednesday, following the refiner's decision to consider issuing bonus issue to shareholders.
Indian Oil in a statement to the Bombay Stock Exchange said its board will meet on August 29 to consider issue of bonus shares. India's biggest oil marketing company is scheduled to report its June quarter numbers on the same day.
In a bonus issue, investors get extra shares, but their holding in the company (in terms of percentage) remains the same. A bonus issue implies that the management is confident of maintaining its future growth, analysts said.
Earlier, HPCL and BPCL had announced bonus shares. Both these companies compete with Indian Oil.
As of 1:49 p.m., shares of Indian Oil traded 4.15 per cent higher at Rs 566.55, outperforming the Nifty which was trading on a flat note.
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