Financial Daily from THE HINDU group of publications
Wednesday, Oct 19, 2005
Financial Daily from THE HINDU group of publications Wednesday, Oct 19, 2005 |
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Markets
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Stocks IVRCL Infrastructures tumbles on funds' selling C.R. Sukumar
Hyderabad , Oct. 18 AMIDST talk of heavy offloading by certain institutional investors, the stock of IVRCL Infrastructures & Projects Ltd has been witnessing major volatility of late. Concerns over expected fall in promoters' equity holding also appear to have fuelled the fall. The stock lost heavily on both the NSE and the BSE during the last three trading sessions. On Tuesday, the stock closed weak by about two per cent at Rs 702.10 on the BSE and at Rs 700.35 on the NSE. Volumes were 60,295 shares on the BSE and 3.6 lakh shares on the NSE. According to market analysts, any sell-off by large institutional investors can put pressure on stock price. "Ever since Citi Corp International Finance Corporation and Chrys Capital-II LLC have sold 15 per cent stake in the company, there have been concerns in the market regarding exit routes of other large institutions. As per the latest distribution schedule, institutional investors hold 63.71 per cent of IVRCL's equity." The markets were agog with news on Monday that Refco Sify Securities, the Indian affiliate of the currently beleaguered US-based futures broker, has resorted to heavy selling in the IVRCL stock through participatory notes (PN) route. Taking advantage of the falling prices, some of the leading mutual funds such as UTI and SBI Mutual Fund bought huge volumes of IVRCL stock on Monday. According to market analysts, the major investment concern of late has been the reducing promoter holding. Currently, the promoters group is holding 11.35 per cent. With the company planning to raise $140-million through FCCBs and GDRs, their holding is expected to further come down to around nine per cent. When contacted, the IVRCL Vice-Chairman and Managing Director, Mr E. Sudhir Reddy, refuted the gossip of heavy institutional investor sales and also allayed concerns over the falling equity holding of promoters. "First of all, Refco Sify Securities is not holding any shares of IVRCL and did not resort to sale. We are not sure if Refco did so through PN route. However, we consider huge volumes changing hands on the bourses as a very positive sign of liquidity. Our stock, along with other construction industry stocks, has been bullish for the last few months. The fall in stock price is again not specific to IVRCL alone," Mr Reddy said. Allaying apprehensions on the falling equity stake of promoters and likely threat of takeover, Mr Reddy said the company does not have a huge asset base to attract the attention of acquirers. "Moreover, the current market price of the IVRCL stock prohibits takeover attempts. For that matter, promoters of many of the leading Indian listed corporates with strong asset base have equity holdings of around 10 per cent only. We do not think that should cause concern," he said.
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