Herd on the street: RCom, Punj Lloyd and Tata Tele…
July 14, 2010
What’s buzzing in Reliance Communications, Punj Lloyd, Tata Teleservices (Maharashtra), MTNL, TVS Motors, Timken, NTPC, BSEL Infra and SEL Manufacturing Company right now
Reliance Communications
The market perception is that details of the tower deal with GTL should have been out a long time ago. Investors are jittery over the delay. A lot of people on the street believe the ratio won’t be in favour of RCom. Late June, RCom sold its tower business to GTL for Rs500 billion. RCom’s Rel Infratel’s tower assets were demerged into GTL Infra and over 2 million shareholders of RCom and the minority shareholders of Rel Infratel will get listed shares of the merged entity. Punj Lloyd
Lot of buzz around this stock — from good result expectations to talk of large fund-based buying returning. Punters are talking about another Rs10 upside from here. The bear cartel is said to be waiting to short at Rs150 levels. Tata Teleservices (Maharashtra)
Several rumours are swirling around this stock. One is about TTML delisting (sceptics argue, however, that the Tatas have never delisted any company so far), the second rumour is that it will delist and then merge with Tata Teleservices. Tata Teleservices Maharashtra is Tata’s Maharashtra and Goa telephony business (Tata Docomo). Tata Teleservices is the umbrella firm that operates Tata Indicom (CDMA services), Tata Docomo’s GSM services, Virgin Mobile, Tata Walky (its brand for fixed wireless phones), Tata Photon (the company’s brand that provides a variety of options for wireless mobile broadband access).
MTNL
Once again, strong rumours of Mukesh Ambani’s interest in the company resurface. Financial Express had reported on 22nd June that Reliance Industries was in initial talks with MTNL to market its 3G services as a franchisee (the RIL spokesperson denied this). RIL recently entered telecom by buying Infotel for $1bn. MTNL, with its huge real-estate assets, has been considered a prize disinvestment candidate for a long time now.
TVS Motors
Despite the company’s denial yesterday, rumours of TVS buying LML assets are still doing the rounds. The stock was extremely volatile on 9th July, touching an intraday high and low of Rs121 and Rs105 respectively on this speculation. Since then it has steadied. LML on the other hand has run up from around Rs10 at the end of June to about Rs13.5. LML is a loss-making firm and its assets are lying idle. Timken
The delisting rumour persists. This rumour has been in the market since mid-June, but is now resurfacing. The delisting is expected to be at a significant premium to current market price like ABB. However, since mid-June, Timken has moved from about Rs125 to the current Rs158, so even if this rumour is true, it remains to be seen what the premium above the already run-up price would be.
NTPC
Aggressive placing of tenders might give some lift to this stock. BSEL Infra
There are rumours of promoters selling share. This rumour probably is rooted in the March 2010 disclosure of shareholding pattern where the promoter selling is apparent. SEL Manufacturing Company
The stock has been down in the dumps for months together. Now there is talk of prolonged selling soon being over. A large chunk of the company’s equity has changed hands over the past one month or so. Now, the speculation is that promoters are buying. SEL is a textile company, manufacturing and exporting cotton yarn, combed yarn, knitted fabrics and knitted garments with production facilities in Ludhiana in Punjab and Baddi in Himachal Pradesh. It also has a terry towel plant. Caution: this is a very operator-driven stock. — Munira Dongre
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