Financial Daily from THE HINDU group of publications
Wednesday, Nov 27, 2002
Financial Daily from THE HINDU group of publications Wednesday, Nov 27, 2002 |
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Stock Markets Markets - Stock Markets FIs lapping up L&T shares Virendra Verma
MUMBAI, Nov. 26 IN the midst of uncertainty over the fate of Grasim open offer for L&T shares, domestic financial institutions have been busy making purchases in L&T shares from the secondary market over the last 8-10 days. Stockbrokers said financial institutions led by Life Insurance Corporation had made purchases of around 20-25 lakh shares. General Insurance Corporation (GIC) is also understood to have made purchases. The buying by FIs in the last few days constitutes less than one per cent of the company's equity. However, brokers said the FIs were not making purchases on expectations of higher open offer price. They said the purchases by financial institutions were being made mainly to hike their stake in L&T and ensure a say in the operations of L&T. Most of these purchases were made above the open offer price of Rs 190 per share offered by Grasim to L&T shareholders. Active purchases by the FIs led to a rise in the stock price of L&T from Rs 191 to Rs 202.45 on November 22 on BSE. However, the stock price has since fallen marginally and today, it closed at Rs 198.40. That buyers are active is also evident in the trading volumes since November 7. For instance on November 7, the volume on NSE was 3.51 lakh shares and touched a high of 30.56 lakh shares on November 22. Similarly on BSE, the volume increased from 1.27 lakh shares on November 7 to high of 14.78 lakh shares on November 25. During this period, the number of shares for delivery has also gone up. Yesterday, in a notice to stock exchanges, L&T expressed concern over the rise in the volume in the company's shares. Currently UTI, LIC, and other insurance companies have combined holding of around 37.5 per cent in L&T. The paid-up capital of L&T is Rs 248.6 crore. As on September 30, 2002, LIC, with 17.42 per cent stake, was the single largest shareholder in L&T. Grasim is the second largest shareholder and after the open offer, its holding had crossed 15 per cent. Other big shareholders include UTI with 10.34 per cent stake. The public holds 31.68 per cent in the company.
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