Aarti Drugs share price surged 10% on Friday morning, taking the stock up over 25% in less than two trading sessions.
Aarti Drugs share price surged 10% on Friday morning, taking the stock up over 25% in less than two trading sessions. The recent rally for the pharmaceutical firm comes after its board approved a bonus issue of shares on Thursday. Shareholders of Aarti Drugs will be getting an additional three equity shares for every share held by them, the company informed the bourses. The stock was trading at Rs 3,100 after hitting an all-time high of Rs 3,122 per share on Friday. Shares of Aarti Drugs have gained 422% since January 1.
The board of Aarti Drugs has approved an increase in authorized share capital of the Company from Rs 25,00,00,000 to Rs 120,00,00,000 by the way of creation of additional 9,50,00,000 equity shares of Rs 10 each. The company’ board has also given approval for the issuance of fully paid up Bonus Share in the ratio of 3:1. This would see every shareholder of Aarti Drugs get three bonus equity shares of Rs 10 each for one fully paid up equity share held by them. “The Company will intimate the “Record Date” for determining eligible Shareholders entitled to receive Bonus Shares in due course,” Aarti Drugs added.
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Aarti drugs will utilize Rs 69.90 Crores of its Free Reserves for implementing the Bonus issue. The bonus shares are expected to be issued within two months. “After the bonus issue the number of shares will increase from 2.33 Crores to 9.32 Crores. This is a positive development for Aarti Drugs,” said Yash Gupta, Equity Research Associate, Angel Broking.
Additionally, investors are also buoyant about Aarti Drugs on the back of its inclusion in the Nifty 500 index from September 25, as informed by the NSE Index Management Sub-Committee yesterday. Analysts have a positive outlook for the API industry, benefitting Aarti Drugs. In the first quarter of this fiscal, Aarti Drugs saw domestic API increase 28.19% on-year basis, while the export API increased by 29.13%. API business currently contributes 85% of Aarti Drugs business. With favourable conditions likely to emerge for domestic API manufacturers in the post coronavirus world, brokerage firm Anand Rathi and Centrum Broking are bullish on the stock.