The scrip of CESC has been a disaster for its investors since 1994. The scrip price lost flesh month after month to go down from Rs 290 in end 1994 to the levels of Rs 50. On the crucial 6 December, 1996, it touched a low of Rs 27. That also happens to be a point of key reversal for this scrip. Investors in CESC has been anguished for more than one reason. First, the West Bengal Government, which would not allow the hike in power rates rightfully due. Second, the promoters penchant for raising funds through equity and debt. If one needed a crystal clear example of a total dry up of shareholder's value, CESC stands as an excellent example.

But the investors have no choice and have to make the best they can out of this scrip. From Rs 27 in December, 1996, the scrip went to Rs 71.25 by January 10, 1997. There followed another reaction to take the scrip to Rs 38 by June 20. The scrip is now moving up and is about to break out of the downslop resistance line at Rs 54. Put this scrip on your watch list and accumulate between now and the Rs 38 on reaction, if any, for long term investment.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.