DRC shareholders approve 75% capital hike via bonus issue

Digital Research Co. (DRC) shareholders approved the board's proposal to increase capital by 75%, lifting the company's capital base from SAR 16.88 million to SAR 29.54 million. The increase will be funded through a bonus share issue, the company said in a regulatory filing.

Shareholders will receive one bonus share for every 1.33 shares held, the company said. The bonus issue capitalizes SAR 12.66 million from retained earnings rather than raising new cash. For existing holders, proportional ownership stays the same – the dilution is purely structural, spread across a larger share count.

DRC provides IT services and digital solutions to government and corporate clients in Saudi Arabia. The bonus issue follows a period of retained earnings growth. Saudi-listed companies often use bonus issues to adjust share prices and increase liquidity. The move does not change the company's enterprise value, though it can shift trading patterns.

The stock price will adjust on the ex-date. The adjustment factor is roughly 0.57, meaning a share trading at SAR 100 before ex-date would theoretically open near SAR 57.14. The actual path depends on market reception and order flow through the adjustment window. Traders who entered before the announcement and are seeing the stock rally into the ex-date face a choice: take the gains or hold through the adjustment.

DRC has not yet set the record date for eligible shareholders. The resolution passed at the extraordinary general meeting authorizes the board to set the timeline. The company did not provide guidance on post-issue dividend policy or any broader capital allocation plan beyond the bonus issue.