The scrip of Chennai-based Shasun Pharmaceuticals hit its upper circuits on the stock exchanges on Monday.

On the BSE, it surged to ₹105.30 during early trade, while on the NSE, it hit the price ceiling of ₹105.10, an increase of 19.9 per cent. On both the bourses, it touched its highest price in 52 weeks.

The rise in share price was accompanied by a spurt in volumes with over 7.5 lakh shares being traded on the BSE. The development followed a company announcement on the BSE that a board meeting to consider allotting convertible warrants, or equity shares, to promoters will take place on Wednesday.

Reflection on valuation

Sam Mukherjee, a pharmaceuticals analyst at financial services company Nomura, says the announcement could have been behind the activity in the scrip. Though a lot depends on the value at which the promoters will buy the shares, or warrants, the announcement of promoters buying shares of the company has enthused investors, adds Mukherjee.

“If the promoter is willing to pay a higher price per share, it reflects the company’s valuation in a way.

So, the traders would have wanted to buy in.”

The promoter holding at Shasun, which includes individuals and corporate entities, stood at 41.97 per cent by end-March, according to details on the BSE website.

Shasun Leasing and Finance and Devendra Estates hold comparatively large stakes of 8.17 per cent and 5.2 per cent respectively, against individual holdings such as that of the company’s Managing Director, Abhaya Kumar S, who holds 2.37 per cent.

comment COMMENT NOW