Herd on the street: Cairn India, Tata Chemicals, Tata Motors, Austral Coke, Oriental Hotels  

August 20, 2010

Cairn India : The buzz in the market is that there are counterbids likely from RIL and ONGC.
According to one report, Vedanta stands to make Rs5 billion if Cairn Energy fails to get shareholders' nod for the deal or solicits a rival bid (a small price to pay if somebody seriously wants to counter bid). Another report states that since ONGC holds 30% in the Rajasthan block, it has the pre-emption or right of first refusal to buy Cairn India (in the block) in case of an ownership change. The block will be apparently valued at around $13 billion. Yet another report states that ONGC will be content to seek operator status on that block.

Tata Chemicals: Rakesh Jhunjhunwala is said to be accumulating the stock.

Tata Motors: There is some buzz of higher weightage in the MSCI index.

Austral Coke: Some rumours are floating around about Welspun looking at buying a stake. Austral makes low-ash metallurgical coke and refractories. It also trades in textiles and rents construction and earth-moving equipment. The promoter company also owns Gremach. Be warned that in January this year the government had ordered an enquiry by the Serious Fraud Investigation Office into alleged financial irregularities by Austral Coke. The corporate affairs ministry had apparently some evidence of fund diversion, manipulation of accounts, and tax evasion by the company. Austral is promoted by Ratan Lal Tamakhuwala and Rishi Raj Agarwal. Welspun is promoted by BK Goenka.

Oriental Hotels: Talk of promoters upping stake and a PE funding also coming in. In July this year, it talked of investing around Rs1.6 billion over the next two years in renovation and upgradation. The company is the Chennai-based associate company of Tata Group's Indian Hotels (which holds 19% in the company). It owns eight hotels with a total of 870 rooms. It is promoted by the Reddy family headed by Varada Reddy. — Munira Dongre