Business Daily from THE HINDU group of publications
Tuesday, Sep 04, 2007
ePaper
Business Daily from THE HINDU group of publications Tuesday, Sep 04, 2007 ePaper |
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Markets
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Stocks
Nilanjan Dey Kolkata, Sept. 3 Like acorns that are on their way to become enormous oaks, stocks of a number of minor companies, all deriving their strengths from larger parents, are increasingly entering portfolios of mainstream investors. The stocks in question, being tracked closely by investors who wish to gain from the value these are expected to create for their stakeholders, represent sectors as diverse as pharmaceuticals, financial services and media. Many have been skimmed off far bigger and better-known entities in recent times. A combination of factors is said to be triggering investors’ interest in the newly-structured companies. The latter, market circles feel, are likely to streamline their operations, tap opportunities in niche businesses, cash in on new technology or even tie up with strategic partners independently. At the end, there will be an unlocking of value. According to Mr R. Srinivasan, Fund Manager, Principal Mutual Fund, some of the stocks that have come to the fore now command sizeable volumes, thanks to the kind of trading that has been taking place. However, as Mr Srinivasan puts it, this has not happened at the cost of volumes recorded by the parent companies’ stocks. Sources pointed towards the financial services segment, which has lately seen more than a few interesting hive-offs. Examples include Mahindra & Mahindra Financial Services, which has attracted investments by the likes of HSBC, ABN Amro and JP Morgan. FII holding in the company’s equity stood at about 23 per cent at the close of the June quarter. Indiabulls Real Estate, which has been carved out of broking major Indiabulls, has witnessed hectic trading almost from the very beginning. Its investors include Goldman Sachs, Citigroup, Morgan Stanley and Fidelity, each figuring prominently in the latest list of institutional investors released by the exchanges. FII holding here was well over 40 per cent. The media space has also seen a number of such cases. These include the Zee group, which has lately listed three companies – Zee News, Wire & Wireless (India) and Dish TV, for its news, cable and direct-to-home businesses respectively. Among these, Dish TV has drawn overseas institutions like T Rowe Price and Oppenheimer as well as domestic investors such as LIC and Sundaram BNP Paribas MF. Group outfit Wire & Wireless too has its share of FII allocations, which together accounted for 27 per cent of the company’s equity. Elsewhere in media, Global Broadcast News Ltd has been rolled out by the TV-18 group. A couple of fund houses – DSP Merrill Lynch and ICICI Prudential – hold its shares; so does Reliance Capital (over 5 per cent as on June 30). On the pharma front, Dabur Pharma has attracted Morgan Stanley and Merrill Lynch, which contribute to the 15 per cent-plus institutional holding in the company. Incidentally, Nicolas Piramal has a few days ago okayed a proposal to de-merge its ‘new chemical entity research unit’ into a separate company. The transferee company will be listed on the exchanges. “The move will help de-risk the parent company’s existing business, it is felt.”
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