Low public float helps Sun TV Network's recovery

Our Bureau Chennai | Updated on October 10, 2011


Deliverable volume points to hectic day-trading activity

Sun TV Network made a smart turnaround on the bourses during the latter part of the day due to low public float. The Sun TV stock closed the day with a gain of over 10 per cent to end at Rs 288.15. During intra-day, the stock had hit a high of Rs 305.25 and a low of Rs 235.05.

Sun TV tanked about 10 per cent on the BSE in early trade on news of raids by the Central Bureau of Investigation across homes and offices of the Maran brothers.

Sun TV Network is owned by Mr Kalanithi Maran, who is brother of former Union Telecom and Textile Minster, Mr Dayanidhi Maran.

According to marketmen, retail investor holding in Sun TV is very low. The June quarter shareholding pattern shows that about 33,100 individuals hold about 6.83 per cent stake or 2.69 crore shares in Sun TV. The rest is being held by the promoters and institutional investors.

Traders who went short on the Sun TV stock early were forced to cover their positions, resulting in a huge surge in the share price, said market participants.

The stock saw a volume of 88.22 lakh shares traded on the NSE and 19.09 lakh shares on the BSE. Deliverable volume stood at just 17.6 per cent and 6.63 per cent respectively, indicating hectic day-trading activity.

The Sun TV futures added 38 per cent or 4.26 lakh shares in open interest, indicating short unwinding.

“Despite nearly 55 per cent stock price correction in the past year, we maintain Hold. Sun's good positioning and business model are key strengths; but rising pressures in key markets are hard to ignore. We believe a meaningful re-rating is unlikely in the current environment with lower growth and uncertainties around the promoter family. Given the risks associated with the stock, we raise our risk rating to High,” said Citi in its recent research report.

The BSE-listed SpiceJet, after touching a low of Rs 20.65, gained 1.65 per cent to close at Rs 21.60. However, it is fairly held by individual investors. While promoters hold 38.61 per cent in SpiceJet, FIIs and domestic institutions are holding 10.16 per cent and 12.09 per cent stake respectively in the company. Retail holding stood just above 20 per cent.

Meanwhile, the stock of Apollo Hospitals Enterprises maintained the downtrend. After touching a low of Rs 485.10, on news of raids at the premises of Ms Suneeta Reddy, the Deputy Managing Director of the Apollo Group, the stock closed at Rs 501, a drop of 1.6 per cent over previous day's close. Ms Reddy holds 26 per cent stake in telecom major Aircel (in which Maxis is the majority owner).

Published on October 10, 2011

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