Calcutta, May 16: Asian Paints — the country’s undisputed leader in paints and one of the top 10 decorative coatings producers in the world — could issue bonus shares for the second time in three years.

In a despatch to the bourses, the company said today, its board would consider issuing bonus shares along with its financial results for 2002-03 on May 28.

In 2000, the company had issued three bonus shares for every five held. The market is expecting Asian Paints to maintain the ratio same this time as well. The company has an equity base of Rs 64.18 crore at present.

The news of Asian Paints issuing bonus shares again triggered a rally in the company’s shares. It shot up to an intra-day high of Rs 399 on the Bombay Stock Exchange, before closing at around Rs 369.75 — Rs 30.25 higher than its previous close.

It’s not often that a company issues bonus shares these days. Most managers are averse to expanding the equity base. They argue it does not benefit shareholders in the long run as it puts pressure on the company’s earning per share (EPS).

However, bonus shares — and more specifically, the rally that follows the announcement — have always excited investors.

Asian Paints had reported a net profit of Rs 113.8 crore on a net income of Rs 1,127.87 crore in the first nine months of 2002-03. The company registered an earning per share of around Rs 18.60 between March and December 2002.

The company had a reserve of Rs 345.37 crore at the end of 2001-02, part of which would be converted into equity shares and issued to its shareholders.

“Asian Paints aims to become one of the top five decorative coatings companies worldwide by leveraging its expertise in the high-growth emerging markets.

“Simultaneously, the company intends to build long term value in the industrial coatings business through alliances with established global partners,” Ashwin Dani, Asian Paints’ vice-chairman and managing director told analysts at a recent meet.

After securing about 45 per cent of the paints market in India, Asian Paints is fast expanding overseas.

It recently acquired Berger Internation Ltd, which gave the company footprint in the Caribbean Islands, West Asia, China and the Asia Pacific.