MUMBAI, April 27: The Reliance stock price never goes up soon after the results", an adage at the Bombay Stock Exchange, proved to be true when shortly after announcement of results the scrip fell. It bounced back, however at the BSE, and was on an upward spiral by the end of the day and beyond it on the kerb, at Rs 198.50 . The scrip lost ground at the National Stock Exchange by over 1.8 per cent to close at Rs 188.15.A sharp jump of 25 per cent in the net profits of the company to touch a high of Rs 1,653 crore, higher than market expectations which had pegged it in the range of Rs 1,500-1,560 crores, saw the punters book profits at the counter.
On the BSE where the stock was traded on the no-delivery category with a book-bandh badla charge of Rs 10, the stock appreciated in early trades by 6.76 per cent to touch an intra-day's high of Rs 201.90 from its previous week's close of Rs 189.10. However, after the announcement of the result on the BSE at 12.30 pm the stock price fell by over 3.5 per cent totouch an intra-day's low of Rs 195 at 2.50 pm to later recover during the last ten minutes of the session and close at Rs 197.30 on the BSE.
Registering a phenomenal volume of over 1.23 crore shares on the NSE, even as the stock continues to be traded in the book closure period till Tuesday, the stock closed at Rs 188.15 registering a net loss of 1.80 per cent.
The stock contributed the highest turnover of Rs 234.51 crore on the NSE, and the turnover touched a high of Rs 241.25 crore on the BSE with the stock closing at Rs 197.30 registering a net gain of 4.33 per cent.
According to market sources, local institutions were reported to have booked profits at the counter above the Rs 200 barrier.
The equity of the company has increased from Rs 460 crore in 1997 to a high of Rs 920 crore on account of bonus issue of 1:1 and has further appreciated to Rs 934 crore due to the conversion of GDRs into underlying shares.
The increase in the equity of the company has been attributed as the main casue for thesharp rise in the volume figures recorded during the week ended April 24.
During the given period over 4 crore shares were transacted on the BSE, with the stock moving in the price band of Rs 189 and Rs 204.90 the intra-week low and high respectively.
``Given the increased equity base, it is difficult for punters to influence the price movement of the stock,'' said a dealer at an FII brokerage firm.``The valuations look demanding,'' he further explained.
Considering the fact that the stock is currently traded at an EPS of over 11.50 times of the usual trend where the stock normally trades at 7-8 times of the book value, market analysts explain the current movement of the stock as a justified one.
A consensus seems to have been formed in the market that the actual impact of the results on the stock price could be observed only after it enters into the no-delivery category on the NSE on April 29.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
