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Sun Pharma In The News

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Sun Pharma plans 1:5 stock split, seeks shareholder nod

 

 

In a bid to im'prove the liquidity of its
stock and make it more attractive to retail investors, Mumbai-based Sun Pharma, which com'pleted its acquisition of Israeli pharma company Taro earlier this week, said on Friday that its board has approved a stock split of 1:5, subject to shareholders' nod. In a notice to the BSE,Sun said its board"has ap-proved the proposal to sub-di'vide the nominal value of the equity shares of the company from the nominal value of Rs 5 each to the nominal value of Re 1 each, subject to approval of members of the company."
 
Sun is going for a stock split after a gap of seven years. The last time the company split its stock was in 2003, when shares of value RslOeach was sub-divided into shares of Rs 5 each. In the last one month, apart from Sun Pharma, 15 more companies listed on the Bombay Stock Ex'change have gone in for a stock split. Among these is Lupin, an'other pharma company, which 
went for a 10 for2 stock split.
 
Sun Pharma's shares soared to an intra-day high of Rs 1,935, up2.48% compared to the previous day's closing, before closing the day at Rs 1,920.55, up 1.7% from the previous day's closing. On Wednesday, following the an'nouncement of completion of the Taro acquisition, Sun Pharma shares had touched an all-time high of Rs 1,984.70 on the BSE during intra-day trade, before closing at Rs 1921.40, marginally down from the previous day's closing.
 
"The price of Sun Pharma shares is at near Rs 2,000 levels, so the move is to attract in'vestors, especially retail investors to the stock," said Sarabjit Kaur Nangra, VP-research, Angel Broking. "What actually drives a company's stock is its fundamental and ac-tions like a stock split do not have any value for existing shareholders," she added.
 
On Wednesday, Sun Pharma, which had won a legal victory in the Israeli supreme court earlier this month, allow'ing it to buy all the outstanding promoters'share in Taro Pharmaceutical Industries, said it had picked up a controlling stake in Taro. The Indian com'pany has picked up the 12.7% held by the Levitt family, the promoters of Taro, thereby increasing its stake to 48.7 % from the earlier 36 %, and its voting rights to 65.8%.
Sun Pharma is believed to have paid close to $37 million (about Rs 170 crore) for buying the promoters'stake. All pend'ing litigations between Sun and Taro directors have also been settled.