Shares of Shanti Gears Ltd hit their 52-week high today following reports that Bharat Forge was in talks to pick up a significant stake in the company. The price surge was accompanied by high trading volumes.

The stock price cooled off a bit after a denial from both the companies. However, the companies' statement instead of clarifying, created some confusion about the actual development.

Responding to the report that Bharat Forge was in talks to buy a major stake in Shanthi Gears, SGL clarified to the exchanges that the "company is not familiar with the decision of the individual shareholders and the company is not aware of any such decision. The company is given to understand that shareholders may be open to such decision but the company is not aware of any concrete information in this regard".

Since the company did not mention the promoters or the CMD Mr Subramanian specifically in its response to the stock exchanges, it was not clear as to who the "individual shareholders" referred to.

Moreover, the company’s admission that it was "given to understand that shareholders may be open to such decision but the company is not aware of any concrete information in this regard" did not help matters.

According to data on the BSE Web site, the promoters held a 44.12 per cent stake in the company. While the FII holding was minimal at 1.41 per cent, DIIs held a 15.74 per cent stake while others held a substantial 38.73 per cent holding.

Bharat Forge, on the other hand, did not deny it outright but only said it was not the source for the info. In its response to the BSE, Bharat Forge Ltd has clarified that the "news report is not based on any information from the company and the Company does not comment on these speculative media reports".

On the NSE, the stock hit a 52-week high of Rs 57.90 before closing at Rs 53.15 (previous close Rs 52.75) with a huge trading volume of 13,59,389 shares.

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