The Asian Paints scrip surged by 7 per cent yesterday at the National Stock Exchange, fuelled largely by the news of ICI Plc buying the 9.1 per cent stake of the Choksey family.
The stock, which was the highest gainer at NSE yesterday, touched the circuit filter band at the upper end, closing at Rs 353.80 against a previous level of Rs 330.65.
The fresh ICI purchase of these shares, being on a spot delivery basis, would not need to be reported back to a stock exchange. It would amount to a deal on a principal to principal basis, marketmen said. National Stock Exchange, where the Rs 127 crore Asian Paints deal had been struck, has only recorded the cancellation of the original deal between DSP-Merrill Lynch and the foreign institutional investors (Morgan Stanley and Capital International).
More From This Section
The share price movement in Asian Paints turned out to be a cause of concern for the market, as the price surge had a direct link to the news leak, which stated at which level ICI Plc was picking up the shares.
According to market circles, the Asian Paints stock had opened weak and slid to Rs 327.10 yesterday, but rose as reports of the fresh deal flowed in.
The stock witnessed hectic trading with 2.44 lakh shares traded yesterday for a total value of Rs 8.45 crore.
The stock has reacted violently at the markets over the past two weeks, reacting sharply as each days development has unfolded. The share price, which stood at Rs 371.05 at the National Stock Exchange on August 1, fell to Rs 298 by August 11, when there was little clarity whether the controversial Rs 127 crore deal would go through.
The stock has since moved up by Rs 55 to Rs 353.80.
This Asian Paints stake has now moved into stronger hands. The new buyer, ICI Plc, in all probability, will seek to consolidate its position in the company.
The scrip should show a strong upswing over the next few trading days, says a key dealer at Lloyds Securities.