Financial Daily from THE HINDU group of publications
Thursday, Aug 05, 2004
Financial Daily from THE HINDU group of publications Thursday, Aug 05, 2004 |
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Markets
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Stock Markets Max India nosedives on Govt move to nix pref allotment Our Bureau
Kolkata , Aug 4 THE Max India stock on Wednesday reacted negatively to the news that the Government would not allow Warbug Pincus to pick up 29 per cent in it through the preferential allotment route. The stock price slumped by 17 per cent to close at Rs 163.70 on the Bombay Stock Exchange. According to an overseas fund manager, the news was definitely negative for the stock, but there is no broader implication for the stock market as the political opposition to the foreign investment in telecom and insurance sector is well known. Max India holds 74 per cent in Max New York Life Insurance Company and 90 per cent in Comsat Max, a company providing VSAT services in the telecom sector. Max Telecom Ventures, a subsidiary of Max India, holds 10 per cent stake in Hutchison Max, the provider of cellular telephone service in the Mumbai circle. The foreign equity limit currently for insurance is at 26 per cent and for telecom 49 per cent. According to Mr Sourav Sengupta of Anagram Stockbroking, the Max India stock has been subdued lately on apprehensions that its plans to allot 29.17 per cent stake to Parkville Holdings, a Mauritius-based Warbug outfit, may not happen. Mr Rajesh Agarwal of CD Equisearch felt that fundmentally Max India was not on a strong footing and business margins have so far been low. "The proposed investments could have given it a booster dose. The news is bad for the investors". It has been in the grip of operators and had a history of volatility in the past, analysts pointed out.
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