The Hindu Business Line : Essar Oil in the buy list of portfolio managers

CERTAIN operators and portfolio management schemes are picking up Essar Oil. According to market sources, portfolio management schemes of two big broking firms are understood to be accumulating the stock. A couple of noted operators are also reportedly cornering the stock.

According to dealers, the brokerages have been buying the stock on non-discretionary portfolio management scheme (PMS) accounts. The counter today clocked of 34.67 lakh shares (31.81 lakh) on the National Stock Exchange. It recorded 50 deals involving 9.11 lakh shares, indicating bulk buying. Some 50.2 per cent of the total traded quantity was presented for delivery. The stock has been registering steady volume increase during the last seven sessions, the highest being on Tuesday at 41.52 lakh shares on the NSE.

It may be noted that a PMS agreement between a client and scheme runner could broadly be divided into two categories - discretionary and non-discretionary. In the case of a non-discretionary portfolio investment, scheme managers are at liberty to choose the stock. Also, these relatively less regulated PMS are not obligated to let the investors know in about the portfolio picks but returns are often assured.

In terms of price, the stock was up 2.5 per cent today. According to Mr Ketan Thacker of Anagram Stockbroking, at the today's closing price of Rs 16.65, the stock traded at 47.5 times its earnings in trailing four quarters.

The July-September quarter results showed declines in net sales and profit by 74 and 71 per cent respectively. According to analysts, it is not clear how the finances for its refinery, which is to come up in 2005, are being tied up. However, the company has rolled out a retail plan of setting up 1,700 outlets by 2005. It has so far set up two retail outlets - in Maharashtra and in Gujarat. It is also selling petrol and diesel at cheaper rates than the PSUs.

Market sources tend to link retail initiative to the recent interest in the stock. The market buzz is that the company was attempting to rope in a strategic investor for the refinery project. The Essar Oil stock's 52-week high is Rs 24 and low is Rs 4.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Bear onslaught

NSE's ad hoc margins pull down market

Block deal in LIC HF

i-flex gains on MSCI inclusion

IFCI offloads LIC Housing shares

SEBI chief defends frequent changes in listing agreement

Essar Oil in the buy list of portfolio managers

Govt proposes new interest rate derivative product

Shipping Corpn: Outlook positive, buy Dec futures

Profit taking halts index stocks rise