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The stock movement of Sun Pharma and Ranbaxy left many stumped on Monday.
If the stock of Ranbaxy, being the beneficiary of the merger deal, closed higher, and that of Sun lower, it would have been logical. But the converse happened.
The Sun Pharma scrip closed on Monday at ₹587.25, up 2.68 per cent, on the BSE, while Ranbaxy shares closed at ₹445.20, down 3.12 per cent.
On the NSE, it was ₹586.95, up 2.65 per cent, for Sun Pharma and ₹443.1, down 3.58 per cent for Ranbaxy.
Prakash Diwan, Director, Altamount Capital Management, said: “How can a stock (Ranbaxy) move up by close to 30 per cent in the last one month despite being in the news for the all the wrong reasons? It is inexplicable.”
Those on the street said there was news of the deal, but very few expected it so soon.
Arun Kejriwal, Director, KRIS Research, said: “Looking at the price-volume data of Ranbaxy during the second half of last week, it seemed that some news was definitely there and today’s announcement confirmed that. One wonders whether it was an open secret for everyone except the watchdog. One is really pained to see that time and again insider trading happens rampantly and there is not a single convicted case (of insider trading) under the law in this country.”
Though Sun Pharma has the reputation of having scripted more turnarounds than any other company in the Indian pharma industry, experts feel it would take at least two-three years to turn around Ranbaxy.
Further, Sun Pharma, during this period, would not be able to post its usual 30 per cent EBITDA margins and 30 per cent sales growth.
Over 1.12 crore shares of Ranbaxy changed hands on the NSE with a delivery percentage of 21.06. On the BSE, the volume was over 8.49 lakh shares.
For Sun Pharma, over a crore shares were traded with a delivery percentage of 50.06 on the NSE. On the BSE, the corresponding traded volume was over 4.37 lakh shares.
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