Unichem peaks on bonus issue, stock split

DALAL STREET SPIKES

Unichem Laboratories touched an all-time high of Rs 668 on Friday as the company's board has finalised an 1:1 bonus for shareholders and a stock-spilt to two equity shares of Rs 5 each from one equity share of Rs 10 each.

Unichem has set March 24, 2004, as the record date for the stock-spilt and bonus. The stock was volatile before closing at Rs 635.30, up Rs 13 from its previous close. Market sources said investors are buying the stock to avail of a tax benefit.

By buying Unichem shares at the current cum-bonus and selling part of the holding ex-bonus, after the stock becomes ex-bonus, investors can show a loss, which they can offset against the huge capital gains they have made generally from the stock market.

However, the bonus shares would have a zero cost of acquisition and, whenever these shares are sold, the entire proceeds would be capital gains.