The Hindu Business Line : Alembic shoots up on bonus tonic

SHARES of pharma firm Alembic Ltd touched a 52-week high of Rs 579.90 on Monday on the BSE. The major driver for the stock is the announcement of the bonus issue in the ratio of two equity shares of Rs 10 for every share held, including to those who were allotted shares in the recent rights issue, provided they pay the full amountcalled up, on or before the record date.

The scrip has been on a strong rally, climbing from a low of Rs 284.50 on February 6 to close today at Rs 563.30, a rise of over 97 per cent in just 10 days. Today, the stock opened strongly but dipped to Rs 504 before ascending again. About 17.3 lakh shares changed hands on the NSE while 5.33 lakh shares were traded on the BSE.

The bonus issue is expected to be approved in the EGM to be held on March 12.

Brokers feel that the stock is overvalued at current rates. "A range of Rs 420-Rs 450 is an ideal price for Alembic Ltd," says Mr Vipul Shah of K.R. Choksey Broking Private Ltd.

There are also market speculations of a stock split . Brokers say the rally could continue if the speculations are correct. "A lot of buying is based on the combination of the two factors — bonus and stock split," says a broker.

Company officials, however, refused to comment on the issue of the stock split.

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