The Hindu Business Line : Focus on ALFL, Reliance cap stocks

THERE was buying interest today from institutions and traders in certain counters of the finance companies. Ashok Leyland Finance and Reliance Capital moved up with strong volume gains on the major bourses.

According to dealers, despite the Bombay High Court's approval today of the merger proposal of Ashok Leyland Finance Ltd (ALFL) with IndusInd Bank, the stock of ALFL shot up.

"This showed that the verdict is more in favour of IndusInd Bank rather than ALFL. The investors are betting on the bank stock, which would come in place of the ALFL stock. Otherwise there is no reason for a new valuation for ALFL stock at this juncture. Incidentally, IndusInd Bank stock too has been rising for the last few days on the exchange," a dealer with an institutional brokerage house said.

Nine shares of IndusInd Bank would be issued to the ALFL shareholders for every 4 shares held.

On the other hand, the Reliance Capital stock also moved up on strong market expectation that the NBFC would soon get a banking licence.

The Reliance Cap stock also attracted several block deals and the traded quantity in the counter soared to 33.33 lakh shares (6.87 lakh shares) on the NSE.

On the BSE, the stock's volume was up to 19.77 lakh shares (3.45 lakh) shares. Some 29.16 per cent of the traded quantity on the NSE in the counter was placed for delivery. The stock today attracted a P/E multiple of 19.6.

The ALFL stock finished 7.4 per cent up from its previous close. The delivery statistics suggest both investment and trading interests. Of the total traded quantity of 1.35 lakh shares, some 64.23 per cent was placed for delivery on the NSE.

At today's price, the stock traded at 6.9 times its trailing four-quarter earnings per share, Mr Ketan Thacker of Anagram Stockbroking pointed out.