Street signs: Arbitrage opportunity in Just Dial, TJL stock gains & more

Arbitrage opportunity in Just Dial
 
Broking firms are advising their retail clients to buy shares of Just Dial to gain from the arbitrage opportunity created by the open offer launched by the arm of Reliance Industries. The potential gains have narrowed as Just Dial’s shares have rallied 4 per cent last week. The open offer will be done at Rs 1,022.25, a 3 per cent premium to the last closing price of Rs 992.25 per share. A correction could improve scope for higher gains. The open offer follows acquisition of 41 per cent stake by Reliance Retail Ventures in the company. Abhilash Pagaria of Edelweiss Alternative Research says, the acceptance ratio for retail investors could be 75 per cent and the entire process could take over two months for completion.              

 
Rolex Rings likely to be in limelight
 

Shares of Rolex Rings are expected to be under the limelight on Monday as the 30-day anchor lock-in period ends. Analysts say the stock could see selling pressure as some anchor investors are expected to take money off the table. Shares of the company are currently trading at Rs 1,090, up 21 per cent over the issue price of Rs 900. Anchor investors hold about 2.44 million shares — 9 per cent stake — in the Gujarat-based firm, which is a manufacturer and supplier of hot-rolled forged and bearing rings. In recent weeks, shares of Zomato and Glenmark Life Sciences have come under pressure after the end of their respective anchor lock-in period.

 
More steam left in Thangamayil?
 
Shares of Thangamayil Jewellery (TJL) rallied 17 per cent last week following a positive report by broking from PhillipCapital. The brokerage said the jewellery company was in a sweet spot thanks to improving same sales growth, expansion drive and – most importantly – the tailwind created by the new hallmarking regulations. “We believe the stringent implementation of hallmarking regulations (in force from June 2021) will lead to market share gains for TJL, as most mom-and-pop jewellers in Tamil Nadu are non-complaint…Valuations at 10 times FY23 estimated EPS offer enough margin of safety to long-term investors. TJL is poised to deliver 20 per cent earnings CAGR over FY21-24,” said PhillipCapital in a note with a price target of Rs 1,000. Currently, the stock trades at Rs 1,097. Some analysts believe TJL can still be a good long-term bet, given the low forward valuations.       

 
Samie Modak