The Hindu Business Line : Merger hopes fuel interest in SBI

AFTER the rumour of GDRs being removed from the FIIs investment limit in State Bank of India, the latest market talk is the merger of the bank with its various bank subsidiaries.

The subsidiaries that are likely to be merged include State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner & Jaipur. Other unlisted banks are also likely to be merged, feel marketmen. If this merger goes through, FIIs investment in SBI would go down due to increased paid-up capital of the bank. This in turn would give FIIs further scope for investing in SBI. Similarly, the listed subsidiaries would also get the benefit of the merger as they would be part of larger bank.

However, the market talk of merger could not be confirmed either from RBI or individuals banks. On these expectations, market players have been accumulating the shares of SBI and its subsidiaries. The accumulation was also seen on Friday. The increased activity was also seen from the rise in the stock price of these banks.

The SBI stock gained 3.02 per cent at Rs 652.45 on the BSE. State Bank of Bikaner and Jaipur was locked in 5 per cent upper circuit at Rs 2,534, State Bank of Travancore gained 5.87 per cent at Rs 3235 and State Bank of Mysore was up 16.97 per cent at Rs 2,163.90.

Gains on molecule sale talk

WITH pharma sector stocks in the limelight, a stock within the sector that gained sharply on Friday was Orchid Chemicals and Pharmaceuticals.

Dealers said the interest in the stock was on market talk that the company is likely to sell one of its molecules. Another market talk was that the company was to launch a new molecule.

But either of this information floating in the market could not be confirmed from the company. But dealers said there has been active interest in the counter for the last few days.

Several institutional investors too are understood to have bought the shares.

On Friday, the stock price of the company gained 12.18 per cent at Rs 295.75 on the BSE with volumes of 13.62 lakh shares; on the NSE, it closed at Rs 295.80, up 11.98 per cent, with volumes of 33.18 lakh shares.

Investment in ventures lures

MAX India stock was locked in 20 per cent upper circuit on Friday. It closed at Rs 320.35 on the BSE with volumes of 1.48 lakh shares; on the NSE, it closed at Rs 319.40 with volumes of 2.76 lakh shares.

Dealers attributed the rise in the stock price to its investment in insurance and telecom ventures. The talk is that several institutional investors have started investing in listed companies, which have made investment in insurance business. In this category they find Max India stock as most attractive.

Virendra Verma

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