Street signs: Index inclusion setback for REITs, Paras IPO in demand & more

Index inclusion setback for REITs
 
Shares of two leading real estate investment trusts (REITs) came under selling pressure after NSE indices revoked its decision to hand them in its indices. The arm of NSE said the decision was taken following some concerns raised by stakeholders, without divulging much details.
 
“These are being examined and a final decision regarding inclusion of REITs/ InvITs will be taken after completion of review and discussions with stakeholders,” it said.
 

Shares of Brookfield India REIT fell close to 9 per cent in two sessions, while Embassy Office Parks REIT declined more than 5 per cent. The two were to get included in Nifty 500, Nifty Smallcap 250, and Nifty Realty.

                               
Samie Modak
 
Paras Defence IPO in demand
 
Shares of Paras Defence and Space Technologies are commanding huge premium in the grey market ahead of its initial public offering (IPO). Sources said the stock has been changing hands between Rs 300-Rs 325, a premium of 70-85 per cent to its upper price band of Rs 165-175 per share. Paras’ Rs 171-crore IPO opens for subscription on Tuesday.
 
At the top end, Paras Defence will have a market capitalisation of Rs 683 crore on a post-diluted basis. The company’s IPO comprises Rs 140.6-crore fresh fund raise and Rs 30.2 crore secondary share sale. The company is engaged in manufacturing and testing of defence and space engineering products and solutions. For the year ended March 2021, Paras Defence had clocked net profit of Rs 16 crore on revenues of Rs 143 crore.

 
Sundar Sethuraman

Arbitrage opportunity in EClerx
 
The Rs 303-crore tender buyback launched by tech firm EClerx Services has created arbitrage opportunity for retail investors, say analysts. The offer price announced by the company is Rs 2,850, 17.6 per cent higher than the last close of Rs 2,424. Brokerages are advising their clients to buy the stock at current levels and tender them in the buyback.
 
The two key risks to this strategy, however, are that the acceptance ratio for retail investors could be only around 15 per cent. Also, the stock is part of additional surveillance measure (ASM) and has a 5 per cent trading limit. This could make it challenging for investors to get-in and get-out of the counter.   

 
Samie Modak