MUMBAI, March 30: Indian Oil Corporation Ltd (IOCL), one of the "navratnas", has suddenly caught the fancy of investors. The hitherto illiquid scrip is witnessing a spate of negotiated deals, believed to have been triggered off by some Delhi-based brokers.According to some market analysts, the government's decision to issue petro bonds has influenced the analysts' long-term rating of the company and led to a sudden interest in the stock.
The shareholding pattern of the government undertaking highlights the fact that only 9 per cent of the equity was disinvested of which 5 per cent is held by the employees. Hence, the stock records an average daily volume of less than 500 shares on the Bombay and National stock exchanges.
Since March 25, the stock has been recording bulk deals of an average 2.5 lakh shares on the BSE. According to data collated by BSE, on March 25 a single negotiated deal of 2.61 lakh shares changed hands at Rs 516.25.
Similarly, on March 26 the counter recorded yet another deal of3.41 lakh shares in the band of Rs 559-560 at a premium of 5 per cent to the official traded price of Rs 530. On March 27 the counter recorded another deal of 2.54 lakh shares at Rs 569. The share has been quoting in the band of Rs 515-875, the 52-week high and low respectively.
According to market sources, the deals have been conducted on behalf of two Delhi-based brokers.
Considering the fact that only five per cent of the stock is available for trading in the market, some analysts feel that the volumes at this counter are not a reflection of the market interest. However, the nature of the trades does provide an insight into the interest at the counter.
"If the change in trading pattern has to be justified on the basis of the petro bonds notified by the government and the trickle down effect of this on the balance sheet of the company it is quite understandable. However, the story behind this move seems to be different," said a market analyst.
According to him, the government's reported decision todivest a further 5-15 per cent of its holdings, of which about 85 per cent would be offered through the GDR route and the rest through the public issue route to the Indian public, could be one of the reasons for the interest in the scrip.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
