Mumbai-based real estate developer Akruti City, which became the second-largest realtor after DLF in terms of market-cap last week, touched a lifetime high of Rs 2,145 on the Bombay Stock Exchange today, recording a rise of 27.53 per cent from yesterday’s close.
The stock price, which has doubled in the last five trading sessions, has seen a massive 290 per cent rise since January 15 this year when it touched a 52-week low of Rs 550. The sharp rise has baffled many market players at a time when other real estate stocks have been hitting new lows due to the continued uncertainty over the sector’s future.
In the case of Akruti, 90 per cent of the stock is held by the company promoters and another 5.61 per cent is held by three institutions — DLF Retail Developers, Pacific Corporate Services and Citigroup Global Markets Mauritius — leaving a very small amount of floating stock in the market.
According to a television channel, the stock exchanges and the Securities and Exchange Board of India have placed the stock under surveillance.
Market experts attribute this huge surge to Akruti going into the ban period in the futures and options (F&O) segment several times since January 15. As per rules, the National Stock Exchange (NSE) has to put restrictions on trading in the derivatives segment of a counter once open interest (OI) in a stock crosses 95 per cent of the market-wide position limit (MWPL), which depends on the floating stock of a company.
When OI crosses 95 per cent of the MWPL, participants are allowed to trade only to unwind positions. New positions can be created only after OI falls below 95 per cent, when the stock comes out of the ban period.
As per NSE, the MWPL of Akruti is 6.70 lakh shares and since January 15, the counter has been put under F&O curbs for 29 out of the 40 trading sessions to date. As of today, Akruti is the only stock on NSE that is facing F&O restrictions.
According to stock brokers, there is huge scope for manipulators to push up the share prices of a company whose floating stock is less and which has a presence in F&O. That seems to have happened in case of Akruti, they say.
| A RISE WITHOUT REASON | |||||
| Company | M-cap | Share price | % rise/fall from all-time high | Sales* | Net profit* |
| DLF | 29,163 | 171.5 | -85.8 | 8,921.70 | 4,470.10 |
| Akruti City | 13,421.00 | 2,012.20 | # | 533.2 | 388 |
| Unitech | 4,320 | 26.7 | -95.1 | 2,506.00 | 918.9 |
| Indiabulls | 6/23/1906 | 91.9 | -88.7 | 39 | 20.5 |
| HDIL | 2,063.40 | 74.9 | -93.1 | 1,361.40 | 768.5 |
| Figures in Rs crore, m-cap & price as on March 18, 2009, *For the nine months ended December, 2008, #The scrip was at an all-time high on Wednesday | |||||
“Since there is less floating stock, no seller in the Akruti counter and some operators are holding on to their long positions, OI in the stock has already crossed the 95 per cent threshold limit. So, no one can now create any fresh position in the stock and that is why Akruti is rising,” says a top Mumbai based broker.
While the BSE realty index crashed over 80 per cent and the benchmark Sensex fell by over 60 percent since January 2008, the stock of Akruti City has seen a significant rise.
(With imputs from Sameer Malgaonkar)
