Shares of state owned firm Oil and Natural Gas Corporation (ONGC) went up nearly by 5 per cent after the firm's board decided to consider issuing a bonus share to increase liquidity ahead of government disinvestment.
The stock surged 4.61 per cent to end at Rs 292.90 on BSE.
During the day, it jumped 5 per cent to Rs 294 - its 52-week high.
At NSE, shares of the company went up by 4.48 per cent close at to Rs 292.35.
The stock was the biggest gainer among the Sensex and Nifty components.
On the volume front, 19.09 lakh shares of the company were traded on BSE and over one crore shares changed hands at NSE during the day.
With all of its about Rs 14,000 crore cash committed in future projects and capital expenditure, the company is considering issuing bonus shares rather than cash dividends as a method of providing income to shareholders.
On October 27, the board will consider the second quarter financial results as also "consider a proposal for declaration of bonus issue", the company said in a regulatory filing.
Issuing bonus shares increases the issued share capital of the company, which is then perceived as being bigger than it really is, making it more attractive to investors.