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Jayanta Mallick

KOLKATA, March 15

THE stock market faces a unique problem in valuing the shares of Tide Water Oil (India) Ltd, a public sector undertaking. ``Even though the scrip is valued at over Rs 1,000, perhaps the top-rated PSU stock, it lacks depth for a fair play of demand and supply as it is listed only on the Calcutta Stock Exchange,'' commented a CSE broker.

The stock has become active since January, just before the announcement of the Government decision to divest 28 per cent stake in the company held by Andrew Yule, another PSU. The 52-week peak of the scrip, Rs 2,130, was touched in January. The counter has seen a low of Rs 529 in the last one year.

Today, the scrip closed at Rs 1,010. On Thursday, it was not traded at all. On March 13 and 12, the stock ruled at Rs 1,250. On March 11, Tide Water closed at Rs 1,275 with volumes of over 10,000 shares. Faulty market-making operation marked the erratic trading and price movement in the scrip, marketmen felt.

``The stock is in the grip of a few Kolkata-based brokers who currently act as value arbiters. This week saw the scrip shed around 28 per cent of its value due to sale of less than 200 shares,'' an analyst said. On Monday, the scrip had opened at Rs 1,300.

Incidentally, Tide Water Oil, which is in the lube market, fetches a significant premium over other lube stocks such as Castrol, Gulf Oil and even IBP.

The company has zero-debt and a very low capital base (less than Rs one crore) and very high reserves and surplus of Rs 62.49 crore as on March 31, 2001. In the last fiscal, it had achieved a turnover Rs 180 crore. It paid a dividend of 50 per cent in 2001-2002. The profit before tax projection in the current year is set at Rs 10 crore (Rs 5.5 crore). The public holding in the company is around 24 per cent and Four Star of Chevron Taxaco group of US holds around 22 per cent.

The proposed divestment is likely to force a change in management control. Market speculates that FIs would also sell off their holdings of 14 per cent following the divestment of the Andrew Yule stake.

Interestingly, some brokers feel that the divestment news was turning out to be dampener for the scrip.

``The lack of participation by Four Star since 1921 when the company was established and the fact that the M K Jalan group, which holds around 12 per cent of the stake, does not have experience in the lube business, lend an air of uncertainty about the future of the company after divestment,'' an active broker in the scrip said.

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