Oil refining and fuel marketing companies Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) will consider issuing bonus shares.

Both companies informed the stock exchanges that their boards will meet on Thursday to consider a proposal for bonus equity shares. They will also declare their financial results following the board meetings.

Companies issue bonus shares to make their stock more attractive for retail investors and provide an alternative to cash dividends while signalling the position of their financial health.

If approved, it would be seven years since BPCL had issued bonus shares, the last being in 2017-18 when the company issued bonus shares in the ratio 1:2. Before that it had given a bonus share of 1:1 in the financial years 2000-01, 2012-23 and 2016-17. Also in 1994, BPCL declared bonus shares in the ratio of 2:1.

HPCL had also previously issued bonus shares in the financial year 2017-18 in the ratio 1:2. Before that the company had issued bonus shares in 1994-95, 1999-00 and 2016-17 in the ratio 2:1, 1:2 and 2:1 respectively.

BPCL had recorded a net profit of ₹3,181.42 crore for the third quarter ended December 31, 2023, up 82.10 per cent from ₹1,747.01 crore during the corresponding quarter previous year. Total income, however, was at ₹1.30 lakh crore for the quarter, down from ₹1.33 lakh crore in the corresponding period the previous year.

HPCL had recorded a net profit of ₹529.02 crore for the third quarter ended December 31, 2023, up 206.80 per cent from ₹172.43 crore during the corresponding quarter previous year. Total income was at ₹1.18 lakh crores for the quarter, up from ₹1.16 lakh crore in the corresponding period the previous year.

The stocks of both companies opened strong on Tuesday following announcements of the proposed issue of bonus shares.

The HPCL scrip opened at ₹528.95 on the BSE before settling at ₹514.25, up 0.12 per cent over the previous close. BPCL scrips also opened strong at ₹625 before settling at ₹604.05, down 0.98 per cent over the previous close.