Chavda Infra, an Ahmedabad-based infrastructure company, has announced a 1:1 bonus issue, meaning shareholders will receive one additional share for every share they currently hold.

The company's stock has surged 53% over the past month and 71% from its 52-week low, bringing its market capitalisation above Rs 439 crore.

A bonus issue, also known as a scrip issue or capitalisation issue, is a corporate action in which a company distributes additional fully paid shares to existing shareholders at no cost. While the number of outstanding shares increases, the total value of each shareholder's holding remains unchanged because the share price adjusts proportionally following the issuance.

Chavda Infra is classified as a smallcap infrastructure stock. The company's recent rally and bonus declaration come amid broader activity in India's infrastructure sector, which has benefited from sustained government capex push, including initiatives under the National Infrastructure Pipeline and increased budgetary allocations for roads, railways, and urban development. Bonus issues by smallcap companies are often used to improve share liquidity and broaden retail participation by lowering the per-share price.

Source: Economic Times Markets