Gujarat Toolroom Share Price Hits Lower Circuit of 5%: Know Why?

On January 7, 2025, Gujarat Toolroom share price hit a lower circuit limit of 5%, dropping to ₹17.14. This fall in Gujarat Toolroom share price came despite the company’s recent announcement of a 5:1 bonus issue.

The Board of Directors of Gujarat Toolroom approved a 5:1 bonus issue on January 6, 2025, offering shareholders five additional shares for every share they hold. However, the company clarified that approval from its members is still pending. According to the filing, the bonus shares are expected to be credited on or before March 6, 2025.

Strategic Financial Moves

The bonus shares will be issued by utilizing ₹116 crore from the securities premium account and retained earnings. This will lead to a significant increase in the company’s paid-up share capital, which will grow from ₹23.20 crore to ₹139.23 crore. Additionally, Gujarat Toolroom has authorized an increase in its overall share capital from ₹100 crore to ₹140 crore, signalling the company’s long-term growth strategy and readiness to seize new expansion opportunities.

Strong Financial Performance 

Gujarat Toolroom’s recent strong financial results have been instrumental in boosting investor confidence. The company reported an impressive 1,016% year-on-year growth in quarterly net profit, alongside a 72.65% rise in quarterly sales. These figures reflect the company’s robust operational efficiency and its ability to scale in response to increasing market demand.

Successful Qualified Institutional Placement (QIP)

Recently, Gujarat Toolroom Ltd. (GTL) successfully raised ₹95.66 crore through a Qualified Institutional Placement (QIP). The placement attracted investments from prominent institutional investors, including Bridge India Fund, Eminence Global Fund, and Multitude Growth Funds Limited.

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