The Hindu Business Line : Ranbaxy shares plunge 10% intra-day

Mumbai, Sept. 2 Ranbaxy shares plunged 10 per cent on Tuesday after it witnessed huge amounts of selling as last minute traders were unable to surrender their shares before the close of Daiichi Sankyo’s open offer on September 4. A situation compounded by the holiday on Wednesday for Ganesh Chaturthi.

Under T+2, Monday was the last day when investors could have bought Ranbaxy shares for cash and got physical delivery of shares and tendered them in the open offer. The delivery will take two days, so investors buying shares will not be able to get physical deliveries in time to tender, said Mr P.K. Agarwal, President Research, Bonanza Portfolio.

The stock closed at Rs 490.35, down 1.89 per cent from its previous day’s close of Rs 499.8. The stock touched an intra-day low of Rs 447.9, which is a drop of 10 per cent over previous day’s close; A total of 17.04 lakh shares were traded on the BSE today.

Ranbaxy’s promoters had, in June this year, sold their entire stake of 34.82 per cent in the company to Daiichi for $4.6 billion.

Open offer

Daiichi Sankyo’s open offer for an additional 20 per cent stake in Ranbaxy at Rs 737 a share closes on September 4. The offer, which began on August 16, is being offered at a premium of 61.23 per cent over the ruling market price.

Ranbaxy was among the worst performing stocks amongst the 30 Sensex stocks today. The share price has dipped 5.47 per cent the last one week.

F&O segment

While the share price of Ranbaxy was down in the cash segment, its on the NSE was up by 3.65 per cent. It closed at Rs 399.80 and saw an open interest of 1.10 crore, which is an increase of 5.68 per cent from the previous day.

“Investors seem to be covering their short positions in the futures segment and taking advantage of the huge price mismatch between the cash and the futures segments,” said Mr Alex Mathew, Head of Research, Geojit Financial Services.

As for why the share price of Ranbaxy did not go up to the open offer price of Rs 737, analysts feel that the stock is “grossly overvalued”. “Daiichi may have spent a particular amount to acquire controlling stake in the company, that does not mean that the company has to be valued at that amount, which could be the reason why we have not seen the share price go up,” said Mr Agarwal.

Good response

Market men feel that in the current market conditions, the open offer should get a fairly good response. “The last day is when an open offer gets the maximum response and also in the current market condition this open offer should get a good response,” said Mr Mathew.

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