Dr Reddy's gives a bonus after 8 years ....

Dr Reddy's Laboratories (DRL) seems to have risen from the ashes as far as issuing a BONUS for its shareholders goes. As a kid, my father always used to sing paeans about DRL since it was one stock that had turned around our turbid life into something more meaningful. I completely owe it to Dr Reddy's for having rescued us from the depth and despair of the slums of Wanorie to our current household. When I go back to Wanorie now, I can only ponder on what may have happened. Somethings in life ... change for the better.

In its 17 or 18 year old history as a public company, DRL had issued a bonus issue only twice ... in 1992 and in 1996 .. if I recall correctly. At that time, I didnt understand the constituents of a bonus issue. Hell ... I didnt understand what stocks are, leave aside bonus issues. Bonus issues occur in terms of a ratio. The ratio decides how many FREE shares you get against the shares currently at your disposal. For example if the company gives you a bonus of 1:1, you get 1 share for every 1 share you possess. So if you have 100 you get another 100. The price of the stock reduces accordingly. In this case, it will become half. Mind you, the ratio has completely contrasting meanings when read in English and Hindi/Marathi. In English 2:3 means 2 shares for every 3 shares. In Hindi, it means ... "Do ke liye teen" which is the opposite in fact of the English meaning.

Now, being an equity player myself, I cant help but express my deep sense of joy coz I read in the Times today that DRL has issued a bonus of 1:1. Its been a long time coming for the bonus. DRL was stuck in a legal suit which ran in the US courts for close to 3 or 4 years and the loss incurred in that case seemed to weigh down the profits made by the company. Dr Anji Reddy has finally come to a point in time where he along with his Board of Directors feel that their shareholders have been deprived of something that should have come much earlier. And here it is.
Long live DRL and I hope that you dont make us wait for another 8 years for the next BONUS !!!