The Bangladesh Securities and Exchange Commission (BSEC) has rejected Himadri Limited’s proposal to issue a 100% stock dividend, citing concerns arising from qualified opinions in the company’s latest audited financial statements for FY2024–25.

In a disclosure to the Dhaka Stock Exchange (DSE), Himadri stated that the regulator was “not in a position to accord consent” to the company’s plan to increase its paid-up capital through the large bonus-share issuance. The BSEC pointed to issues related to intangible assets, tax liabilities, and capital reserves areas where auditors had expressed reservations—raising doubts about the firm’s financial readiness for such an aggressive dividend move.

Despite the announcement, Himadri’s share price remained unchanged at Tk688.90 during Wednesday’s trading session. The company’s board had previously recommended a 5% cash dividend in addition to the 100% stock dividend for FY25.

Himadri reported earnings per share (EPS) of Tk3.81 for FY25, up from Tk3.42 the year before. Its net asset value (NAV) per share inched up to Tk522.87 from Tk522.19. However, net operating cash flow per share (NOCFPS) dipped into negative territory at Tk1.70.

The regulator’s decision comes amid heightened scrutiny of Himadri’s rapid share-capital expansion. In FY23, the company issued an extraordinary 250% stock dividend, dramatically increasing its total number of shares. Prior to that issuance, the company’s stock price had surged above Tk7,000 per share, but after the record date and subsequent price adjustment, it fell sharply to around Tk2,168 fueling concerns over speculative trading and inflated valuations.

The latest rejection underscores the BSEC’s cautious stance toward companies pushing for large bonus-share distributions without strong financial justification.