After a gap of five years, diversified conglomerate ITC announced a bonus bonanza on Friday as it prepares to enter its centenary year.

At the board meeting here on Friday, the directors recommended bonus in the ratio of 1:1, the company said in a regulatory filing with the Bombay Stock Exchange, pending shareholder approval at the annual general meeting on July 23. The board also approved increasing the authorised share capital of the company from Rs 500 crore to Rs 1,000 crore.

After the announcement during market hours, the ITC stock took off, touching an all-time high of Rs 299.70 before closing the day at Rs 294, up 0.12% while the 30-share benchmark Sensex fell 0.26%. According to analysts, the stock had gained over 10% in the past one month on strong Q4 results and expectations of a bonus announcement.

Asked how the bonus would affect ITC shares, analysts said the stock is likely to trade rangebound till the announcement of its quarterly results.

ITC turns 100 in August. A company statement said the bonus issue was to acknowledge ?the unstinted support of shareholders who have steadfastly stood by the company through this inspiring voyage of growth and transformation.? The company which was once known as a cigarette-maker now runs the second-largest hotel chain in the country, has made its mark in FMCG, is the market leader in the paperboard and packaging industry and is a frontrunner in agri-business.

ITC has an equity capital of Rs 381.82 crore. It had last issued bonus shares five years ago in 2005, in the ratio of 1:2, when it had also announced a stock split. Prior to that, it issued bonus shares (1:1) in 1994. The company?s first issue of bonus shares was in 1978.

ITC posted a net profit of Rs 1,028 crore for the quarter ended March 31, 2010, 27% up from Rs 809 crore in the corresponding period last fiscal. While announcing its Q4 results, it had also announced a dividend of Rs 10 per share.

The total cash outflow because of the centenary dividend will be Rs 4,452.33 crore, making it one of the highest dividend payouts in the private sector.

In FY09-10, the company had earned revenues of Rs 18,382 crore and posted a net profit of Rs 4,061 crore.