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No, we are not talking about numerology. Checking and double checking names is quite important in the stock market too.
Not that AgarwalEven experienced investors can fall prey to a misreading of names. A recent instance is Adhunik Industries. Vedanta Resources Pvt Ltd on Tuesday bought 2.7 lakh shares of Adhunik Industries at ₹99.53 a share, according to BSE bulk deal data released on July 11. The number of shares bought by Vedanta Resources represents 0.6 per cent of the total outstanding shares of Adhunik Industries.
But if you perked up at the thought of Anil Agarwal going on a buying spree, Vedanta Resources has nothing to do with the Anil Agarwal-controlled Vedanta Group. Anil Agarwal is the founder and Chairman of Vedanta Resources Plc. He controls Vedanta Resources Plc through Volcan Investments, a holding vehicle with a 61.7 per cent stake in the business.
The Vedanta Resources which bought stake in Adhunik Industries is a Kolkata-based firm. According to information available on the Internet, Vedanta Resources is a Kolkata-headquartered company involved in ‘activities auxiliary to financial intermediation, except insurance and pension funding’. Those who had invested in the company based on the assumption that Anil Agarwal Group is buying a stake in Adhunik, will have reason to regret it.
Blind followersCopycat investing is quite widespread in India. Many track Rakesh Jhunjhunwala’s buys and sells closely. Some investors blindly invest in the companies where he acquires positions.
A couple of years ago, Surana Solar, a little known Hyderabad-based company, shot into the limelight on talk of Rakesh Jhunjhunwala buying a stake in the firm. NSE bulk deal data had revealed that Rakesh Jhunjhunwala had bought 2.56 lakh shares or 0.5 per cent stake in the Hyderabad-based company at around ₹55.
Surana Solar shares jumped 18 per cent immediately but later corrected on a clarification from the big bull himself that he did not acquire any shares in the company. It turned out to be a namesake who had bought the shares!
Some people mistakenly assume that if a certain part of the name resembles a well-known group, it belongs to that group. Reliance Chemotex Industries, a textile company, is mistakenly identified with the Reliance Group, though it is a different entity altogether.
Titan Securities or Titan Biotech have nothing to do with Titan Industries (a Tata Group company). Some even believe that company names that start with ‘Hindustan’ are Government-owned companies!
The lesson for investors clearly is to go beyond the name when making trading or investing decisions.
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