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Sanjay Sardana & Aabhas Pandya
NEW DELHI, Aug 24: Institutions and mutual funds have steadily increased their holding in Archies Greetings and Gifts to around 12-15 per cent. Birla Mutual Fund and SBI Mutual Fund have hiked their stake in this Delhi-based company, which has a small equity base of Rs 3.2 crore. The two funds together hold 8-10 per cent of the equity. According to market sources, there have been buy enquiries from Apple Mutual Fund and HB Mutual Fund.
Birla Mutual Fund holds close to one lakh shares and the holding has gone up from close to 80,000 in March this year.The institutional interest in Archies Greeting has pushed the scrip close to Rs 300. Institutions, who entered the stock in the price range of Rs 100-170, have seen the stock zooming from Rs 90 in April-May this year to the current level of Rs 300.
NEW DELHI, Aug 24: Institutions and mutual funds have steadily increased their holding in Archies Greetings and Gifts to around 12-15 per cent. Birla Mutual Fund and SBI Mutual Fund have hiked their stake in this Delhi-based company, which has a small equity base of Rs 3.2 crore. The two funds together hold 8-10 per cent of the equity. According to market sources, there have been buy enquiries from Apple Mutual Fund and HB Mutual Fund.
Birla Mutual Fund holds close to one lakh shares and the holding has gone up from close to 80,000 in March this year.The institutional interest in Archies Greeting has pushed the scrip close to Rs 300. Institutions, who entered the stock in the price range of Rs 100-170, have seen the stock zooming from Rs 90 in April-May this year to the current level of Rs 300.
The scrip has remained more or less illiquid with listing only on the Delhi Stock exchange (DSE), but will soon gain liquidity with listing on the National Stock Exchange (NSE) in the next two weeks. A strong brand name with a distribution network of over 300 franchises, 25,000 reatil outlets, growth in the card business and impressive performance seems to have attracted institutional investors.According to the chief investment officer of a Mumbai-based mutual fund, Archies Greetings in an interesting line of business, and has grown with the culture of consumerism in the country.
``Their products are innovative and since they have cards for every occassion, Archies has been successful in creating a niche in the market. Their cards are well-produced,'' he said.
Fund managers are of the opinion that the valuations are still pretty attractive at the current level of Rs 280. ``The price is low, considering that the company is in a potentially high-growth area with good franchises.
To top it, its balance-sheet is debt-free,'' elabortated another fund manager.``Although Archies is the market leader, the turnover is only Rs 45 crore. Thus, the current size is nothing in comparison to the tremendous potential card business offers. If you want to communicate your feelings, card is the best medium and here, Archies' products are creative. If every person were to send a card to every other person in this country ten years down the line, it means 40-50 crore cards in one year,'' pointed out an analyst.According to market sources, although UTI too was keen to pick up a stake in the company, but a low floating stock has forced the behemoth to stay away from the counter.
Promoters hold close to 70 per cent in the total equity of Rs 3.24 crore and with listing only on the Delhi Stock Exchange, the counter is illiquid. The company has only around 10 lakh floating shares in the market.In order to improve the scrip's liquidity, Archies greetings is seeking listing on the National Stock Exchnage and will be listed in the next couple of weeks. The scrip's rise to the current level would help the company seek listing on NSE as the company needs to have a minimum market capitalisation of over Rs 40 crore during the past six weeks. The company's impressive performance has further aided the rally in the stock. After a 90 per cent growth in net profit to Rs 4.75 crore in 1997-98, the company reported a 60 per cent growth in the first quarter ended June 1998.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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