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Institution, HNI buying seen in Rishabh Digha Steel

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Plans pref allotment of 25 lakh equity shares at a premium of Rs 20/share

Jayanta Mallick

Kolkata, March 8

Rishabh Digha Steel & Allied Products is attracting institutional and HNI attention. The stock today clocked a traded quantity of over 10.17 lakh shares on the BSE (fortnightly average on the exchange is 2.89 lakh shares). The stock's traded volume witness a marked increase in the last two days.

The stock price, however, dipped 10 per cent to Rs 26.25 at close after peaking at Rs 29.75 against the previous close of Rs 29.15. Following today's slide, it still maintained a marginal weekly gain. At the end of the session, the counter's gain in the last one month stood at 13.64 per cent.

According to market sources, the company, which is into steel processing (finishing and cutting HR and CR coils), and looking for acquiring an unlisted steel processing unit, seemingly is a target of market accumulation by an insurance company and a Mumbai-based group of HNIs, who separately bought around a total of 6 lakh shares yesterday and today.

Sources close to the management suspected that the HNI accumulation could be related to a couple of Maharashtra steel companies, with explicit interest in Rishabh for forward integration.

Mr Ashok Mehta, Managing Director of Rishabh, who is travelling abroad, was incommunicado.

The debt-free and profit-making company, recommend its first interim dividend of 10 per cent at its board meeting on January 21 following improvement in the profits in the last two quarters. It has also taken up a Rs 50 crore expansion plan and has decided to make preferential allotment of 25 lakh equity shares of Rs 10 each at a premium of Rs 20 a share.

(This article was published in the Business Line print edition dated March 9, 2006)
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