Financial Daily from THE HINDU group of publications
Tuesday, Jul 27, 2004
Columns - Ear to the ground
IOC surges on ratio talk
Rumours that the merger ratio has been finalised saw the stock of Indian Oil Corporation (IOC) move sharply on Monday on the bourses. According to the market grapevine, the merger ratio (of IOC-IBP Company) has been fixed at 2:1, i.e. for every two shares of IOC you get one share of IBP.
Analysts maintain that balance sheet valuations peg it to around 1.5, but add brand value etc and it works out to two. The stock of IOC ended at Rs 382.90, up 6.15 per cent, with around 3.7 lakh shares traded on the BSE. IBP ended the day at Rs 519.05, up 0.86 per cent, with around 64,773 shares traded on the BSE.
Block deal spurs MTNL volumes
Early trades saw the counter of MTNL witness a block deal of around 12 lakh shares on the BSE. As per market talk, the deal was by DSP Merrill Lynch and was an inter-scheme transfer between its funds. While the stock lost ground by almost two per cent pricewise on the bourses on Monday, it did, however, witness huge volumes.
With the Government having ruled out the merger of MTNL with BSNL, the stock bounced back into the limelight on the bourses on account of a huge tax refund (around Rs 1,500 crore - Rs 2,000 crore) that it is to get post-winning an appeal over tax payments on licence fees last month.
There was some speculation that the counter may have lost ground following the company announcing nominal growth in its first quarter results. Brokers, however, said the numbers were in line with market expectations and as such had been already been discounted.
MTNL ended the day at Rs 133.85, down 1.91 per cent, with around 17.90 lakh shares traded on the BSE. On the NSE, the stock ended at Rs 133.90, down 1.83 per cent, with around 12.95 lakh shares traded.
Reliance driven by gas find buzz
The rumour mill appeared to be spinning overtime on the Reliance counter. This time around the market was awash with talk of another gas find in the Krishna Basin which seemed to be just what operators needed to shore up volumes at the counter.
Brokers maintain that the stock has run up by almost 14 per cent over the last 4-5 trading sessions. There was also speculation in the market that the promoters themselves were active at the counter.
The stock ended at Rs 477.60, up 2.45 per cent, with around 43.65 lakh shares traded on the BSE.
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