The Hindu Business Line : Uniphos Enterprises zooms

THE stock price of Uniphos Enterprises has more than doubled in just a week's time due to the company's plans to foray into trading, selling and manufacturing of agricultural inputs such as seeds, food grains, commercial crops and others.

The stock increased on the BSE to Rs 23.09 from Rs 10.51 on September 7, a gain of 119 per cent. Similar trend was seen on the NSE. The volumes in the counter have also jumped sharply during this period. Compared to average volume of around 30,000 shares on BSE and NSE each, the volume jumped to more than 20 lakh shares each.

In today's trading, 34.69 lakh shares were traded on the BSE. On the NSE, it was 44.28 lakh shares.

Brokers said the interest in the stock is due to the approval by the shareholders last month to foray into purchase and sell various agricultural inputs. A senior company official said this (venturing into vegetable inputs) is just an enabling resolution and when it will actually happen is yet to be decided. However, he said Uniphos Enterprises holds 20.13 lakh shares (over 7 per cent stake) in United Phosphorous and its current market value is around Rs 135 crore, which is higher than the total market cap of Uniphos Enterprises.

However, several brokers said the stock price rise is mainly to give exit to various institutional investors who hold large stake in the company. These institutional investors received shares of Uniphos Enterprises following the restructuring of Untied Phosphorous.

"Rise in the stock price is only to give exit to institutional investors. If the plans to enter into new business of agriculture inputs are true then buying should be in United Phosphorus and not in Uniphos Enterprises," said an analyst with a domestic broking firm.

He said investors should avoid purchasing shares of Uniphos Enterprises at current prices.