Axita Cotton announces ambitious bonus allotment, ventures into carbon credits

In a strategic move aimed at increasing shareholder value and pushing for sustainability, Axita Cotton Limited, a prominent producer of cotton bales and cotton seeds, has announced the allocation of bonus equity shares. The bonus issue, approved in a landmark Board of Directors meeting on August 9, 2024, grants one bonus share for every three shares held by shareholders. The record date for this allotment was set as September 20, 2024. The company confirmed this development in its press release on October 11, 2024.

Axita Cotton’s bonus share issue is expected to not only boost shareholder confidence but also enhance the company’s capital structure. Following this bonus issue, Axita Cotton’s paid-up equity share capital has risen from ₹26.08 crore to ₹34.77 crore, an expansion supported by drawing ₹8.69 crore from its free reserves. The move to issue bonus shares underscores the company’s intention to reward its investors and ensure they remain integral to its growth story.

Managing Director Kushal Patel expressed enthusiasm over the development, noting that the allotment of bonus shares reflects the company’s strong future outlook and its commitment to its loyal shareholders. He emphasized that rewarding shareholders with bonus shares is part of Axita Cotton’s continued efforts to share its success and build a robust investor base.

Axita Cotton embarks on an eco-friendly journey

Alongside the bonus allotment, Axita Cotton has also announced the launch of its pioneering carbon credit project—a significant stride in the company’s push towards sustainable and regenerative agriculture. Under the voluntary carbon market, the company has successfully registered its first pilot project to generate 200,000 carbon credits, which are projected to be valued at ₹4.98 crore. The company aims to spearhead sustainability by incorporating advanced methodologies such as Geographic Information Systems (GIS), Environmental Simulation Modelling, and Digital Monitoring, Reporting, and Verification (DMRV) systems.

The project is designed to contribute to five of the United Nations’ Sustainable Development Goals, ensuring financial benefits reach local farmer communities. The generated revenue from the carbon credits will be used as incentives for these farmers, reflecting Axita Cotton’s commitment to community growth and environmental responsibility.

Kushal Patel highlighted that the initiative is a meaningful step in Axita Cotton’s broader sustainability strategy, aiming to foster regenerative practices while also addressing the urgency of climate action. The company’s pursuit of carbon neutrality includes the adoption of Direct Air Capture (DAC) technology under the Carbon Capture Utilization and Storage (CCUS) framework, which emphasizes reducing carbon emissions and enhancing environmental stewardship.

Long-term vision for carbon credit initiatives

The bonus share issuance and the carbon credit project are part of Axita Cotton’s broader growth strategy. The company has ambitious plans for introducing eleven more carbon credit projects over the next seven years, with a goal of generating approximately 2.2 million carbon credits—estimated to reach a market value of around ₹55 crore. These efforts not only demonstrate Axita Cotton’s commitment to corporate social responsibility but also signal its readiness to tap into emerging opportunities in the carbon market.

Axita Cotton’s shares are listed on the Bombay Stock Exchange (BSE) under the code 542285 and the National Stock Exchange (NSE) under the symbol AXITA. Following the recent announcements, market sentiment appears to be optimistic, with shares showing positive trends amidst investor enthusiasm over the company’s initiatives for growth and sustainability.

Axita Cotton’s bold approach—from issuing bonus shares to embarking on groundbreaking carbon initiatives—demonstrates its commitment to growth, shareholder value, and environmental responsibility. As the cotton industry faces mounting challenges, the company positions itself not only as a leader in production but also as an innovator in sustainable practices.