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  • Jul 4, 2022 - Pharma Company to Issue Bonus Shares this Week. Are you Eligible?

Pharma Company to Issue Bonus Shares this Week. Are you Eligible?

Jul 4, 2022

5 Indian Companies that are Leading the Green Hydrogen Revolution

A whole bunch of stocks will be in focus this week as they undergo their corporate actions and declare dividend, bonus shares, etc.

One of the leading Indian pharma stocks engaged in research, development, manufacturing and marketing of generic pharmaceutical formulations, Torrent Pharma is set to declare bonus shares later this week.

Torrent Pharma is the flagship company of the Torrent group which also has presence in power and city gas distribution businesses.

Here are three things to know before the company declares bonus shares:

  • Torrent Pharma will issue bonus shares in the ratio of 1:1 i.e., one share for every one fully paid-up equity share held as on record date fixed for the purpose.
  • The record date for this purpose of bonus shares is 11 July 2022 while the ex-date is 8 July 2022.
  • When the pharma company announced bonus in May 2022, it also announced a final dividend of Rs 23 per equity share of Rs 5 each, which is 460% on its face value.

    This included the special dividend of Rs 15 per share.

The issue of bonus shares for their shareholders will help to increase the liquidity of the stock as well as to decrease its stock price to make if affordable for investors.

Corporate action events often bring material changes to a company through changes in the capital structure.

In case of bonus, they might seem to be good thing, but they actually give investors nothing they didn't already have.

In substance, it's just a way of breaking up the same company into a higher number of shares and distributing these additional shares pro-rata to shareholders.

It's like dividing a pizza between 5 people. You can either cut it into 5 equal pieces and give one piece to each person or you can cut it into 10 pieces and give two pieces per person.

How Torrent Pharma has performed in 2022 compared to its peers

Here's how Torrent Pharma has performed so far in 2022.

Nifty Pharma Index Constituents Performance in 2022

Company CMP (Rs) YTD (%)
Sun Pharmaceutical Industries Ltd. 827 -2%
Divi's Laboratories Ltd. 3,635 -22%
Cipla Ltd. 950 1%
Dr. Reddy's Laboratories Ltd. 4,384 -11%
Torrent Pharmaceuticals Ltd. 2,915 -11%
Gland Pharma Ltd. 2,656 -31%
Abbott India Ltd. 19,082 -2%
Biocon Ltd. 312 -15%
Zydus Lifesciences Ltd. 362 -25%
Alkem Laboratories Ltd. 3,020 -17%
Source: Equitymaster

How Torrent Pharma has performed recently

Torrent Pharma share price opened the day 1.5% higher today at Rs 2,950 against its previous close of Rs 2,915.

As the session progressed, it erased gains and ended marginally lower at Rs 2,905.

Torrent Pharma has a 52-week high quote of Rs 3,304 touched on 31 December 2021 while it has a 52-week low quote of Rs 2,485 touched in May this year.

Over the year gone by, shares of Torrent Pharma have a muted performance to show.

At the current price, the company trades at a price to earnings multiple of 63 times while it trades at a price to book multiple of 8.3x.

About Torrent Pharma

Torrent Pharma is the eighth largest player in the domestic pharma market with a presence in various therapeutic segments. The company has an arrangement with Novo Nordisk for manufacturing and supplying insulin for the Indian market.

The exports business of Torrent Pharma is carried out both by its foreign subsidiaries as well as directly by the parent company.

Torrent Pharma has seven manufacturing facilities in India and one in Levittown, Pennsylvania, USA.

For more details, check out Torrent Pharma's fact sheet and quarterly results.

For a sector overview, read our pharmaceuticals sector report.

You can also compare Torrent Pharma with its peers:

Torrent Pharma vs Aurobindo Pharma

Torrent Pharma vs Lupin

Torrent Pharma vs Dr Reddy's Lab

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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