Buoyed by a strong financial performance, a handful of pharmaceutical companies are coming out with bonus issues and marketmen expect some more to follow suit.
FDC has joined the bandwagon by announcing that its board will consider a bonus issue. The move was greeted by the stock market over the past three trading sessions. In fact, the stock scaled to an all-high time on Thursday.
Market operators said the companies, which might join the bonus bandwagon included IPCA Laboratories. "IPCA is the best performer among the all pharma companies. It may consider a bonus issue or any other scheme that rewards the shareholder," said C B Desai, chairman of CD Equisearch, a stockbroking firm.
An analyst said a section of pharmaceuticals companies, which were earning handsome from exports, were doing well while those dependent on domestic sales witnessed decline in business. The companies coming out with bonus issues earned remarkable growth from exports.
FDC 's intention to come out with a bonus issue followed Alembic and Wockhardt that announced doling out of bonus shares last week. While Alembic declared a liberal 2:1 bonus (two shares for every one held), Wockhardt announced a 1:2 bonus (one share for every two held).
Late last month, Unichem Laboratories announced a liberal 1:1 bonus (one bonus share for every one held). Earlier Hikal had announced a 1:2 bonus (one share for every two held).
Alembic launched a rights before the introduction of bonus issue. Wockhardt and Unichem are splitting the face value of shares of Rs 10 each into two of Rs 5.
In Icra report said with exports continuing to contribute significantly to the overall revenues of the prominent pharmaceutical companies, they were likely to play an important role in the industry.
Domestic sales of some companies were affected by the brand rationalisation wherein certain products were discontinued. Quite a few companies continued to focus on key brands as well as chronic therapy segments, the report added.