SC Agrotech Limited Proposes 1:10 Split and 4:5 Bonus Issue

SC Agrotech Limited has proposed a 1:10 stock split followed by a 4:5 bonus issue, alongside a Rs 61 crore increase in authorised equity capital, with shareholder approval scheduled at an EGM on 11 December 2026. The proposals would raise the number of shares held by eligible investors without changing the underlying value at the time of implementation.

What did SC Agrotech approve on 13 November 2026?

SC Agrotech's board recommended three linked changes to its equity structure at its meeting on 13 November 2026: a 1:10 subdivision of equity shares, a 4:5 bonus issue after the split, and an increase in authorised equity share capital. All the proposals remain subject to shareholder approval and other required approvals and procedures.

Under the proposed stock split, every existing equity share with a face value of Rs 10 would be divided into 10 equity shares of Re 1 each. The company stated that this subdivision would maintain its aggregate paid-up share capital at Rs 75.99 crore at the split stage. A stock split changes the number of shares and face value per share, but does not by itself alter an investor's proportional ownership.

The board also recommended issuing four fully paid bonus equity shares for every five shares held after the proposed subdivision. If approved and implemented in this sequence, the bonus issue would increase SC Agrotech's paid-up capital to Rs 136.79 crore. Applicable record dates have not been disclosed in the information provided.

How would the 1:10 split and 4:5 bonus issue work?

SC Agrotech has proposed that the stock split occur before the bonus issue, meaning the bonus entitlement would be calculated on the expanded post-split shareholding. This sequencing is important because the 4:5 bonus ratio applies after each existing Rs 10 share has been converted into 10 Re 1 shares.

For example, an investor holding 400 shares before the actions would hold 4,000 shares after the 1:10 split. A 4:5 bonus issue on that holding would add 3,200 shares. The investor would then hold 7,200 shares, assuming eligibility on both relevant record dates and completion of all approvals.

The combined actions would increase the share count for an eligible shareholder by 18 times compared with the pre-split holding. The market price per share would ordinarily be adjusted to reflect the split and bonus issue when the corporate actions take effect. The actions do not independently create additional economic value for shareholders.

Why is SC Agrotech increasing its authorised share capital?

SC Agrotech's board approved an increase of Rs 61 crore in authorised equity share capital, from Rs 76.50 crore to Rs 137.50 crore, subject to shareholder approval. The proposed revised authorised capital would be divided into 13.75 crore equity shares of Rs 10 each.

Authorised share capital is the maximum equity capital a company is permitted to issue under its constitutional documents. Raising this limit creates the capacity needed to issue the proposed bonus shares. It is separate from paid-up share capital, which represents capital corresponding to shares actually issued and paid for.

The company reported that paid-up capital would remain Rs 75.99 crore following the subdivision because the lower face value would be offset by a proportionately higher number of shares. The subsequent bonus issue, if completed, is proposed to raise paid-up capital to Rs 136.79 crore.

When will shareholders vote on the proposals?

SC Agrotech has scheduled an Extraordinary General Meeting for 11 December 2026 to seek shareholder approval for the proposed capital increase, stock split and bonus issue. The board recommendations do not become effective solely because they were approved at the board meeting.

The company must complete the relevant shareholder, regulatory and procedural steps before implementing the actions. The information available does not specify the record dates for the split or bonus issue. Record dates will determine which shareholders qualify for the revised share count and bonus entitlement.

The board meeting had initially been scheduled to consider a potential dividend as well as the split and bonus issue. However, consideration of the dividend was deferred to a subsequent quarter. Therefore, no dividend proposal is part of the announced corporate actions under consideration at the 11 December EGM.

What does the proposal mean for investors and trading?

For existing shareholders, the key practical effect is a substantially higher number of shares after the split and bonus issue, provided they meet the eligibility conditions. In the illustrated case of 400 pre-action shares, the holding would become 7,200 shares after both actions. The proportional interest in the company would generally remain unchanged immediately after the corporate actions.

The reduction in face value from Rs 10 to Re 1 is intended to make each share available at a lower per-share trading price after adjustment. The bonus issue would further increase the number of outstanding shares. These mechanics can affect trading denominations and the number of shares available in the market, but they should be assessed separately from the company's operating performance and financial results.

Investors should distinguish between the announced ratios and their eventual implementation. The proposals are pending shareholder approval, while record dates and other implementation details have yet to be disclosed. SC Agrotech's shares are listed on the BSE under scrip code 526081.

Conclusion

SC Agrotech has proposed a linked equity restructuring that combines a 1:10 stock split, a 4:5 post-split bonus issue and a Rs 61 crore increase in authorised share capital. The split would preserve paid-up capital at Rs 75.99 crore initially, while the proposed bonus issue would raise it to Rs 136.79 crore.

The immediate event to watch is the EGM on 11 December 2026, where shareholders will vote on the proposals. Investors should also monitor company disclosures for approval outcomes, record dates and the implementation timetable, as well as any later update on the deferred dividend consideration.