The Hindu Business Line : Adlabs Films captures attention

THE announcement that Reliance Capital has picked up 51 per cent stake in Adlabs Films sent the stock into a tizzy at the markets. The stock touched its 52-week high of Rs 286.90, before cooling off a little to close at Rs 280.50, a gain of 16.58 per cent in value.

Though the news-based trigger today saw the stock take a substantial jump, it has been climbing all through the month. In fact, it has moved up by over 71 per cent in the last month. On June 1, it was quoting at Rs 163.50.

The stock traded on robust volumes today. On the BSE, over 25 lakh shares were traded and on the NSE, it registered trades of 64 lakh shares worth Rs 179 crore.

Market experts view this as a big step forward for Adlabs Films, as well as Reliance Capital's foray into retail businesses.

"In theory, the belief is that if Reliance group buys into a stock, it will become the number one or two in the industry. Only time will tell how this unfolds in reality," said Mr Ramesh Damani, Member, BSE.

The Reliance deal is done through a preferential allotment of equity shares or warrants, with the option to convert them into equity shares. The company informed the stock exchanges that the offer is being made to Reliance Land Private Ltd. This allotment is to strengthen the company's financial position, and to generate long-term resources for implementing future growth plans, the company has told the exchanges.

As of March 31, Mr Manmohan Shetty and Mr Vasanji Mamania held 63.02 per cent in the company.

Mr Mamania sold part of his holding through the open market on June 30 and July 1. His holding is now down to 26.10 per cent (from 31.51 per cent), the company said in a notice to the stock exchange.

Reliance Land Private Ltd proposes to acquire management control of the company.

Analysts are of the opinion that the stock has become very expensive at its current level. Many dealers expressed surprise that investors were not booking profits during today's rally.

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