Home finance scrips steal show

Other attractions: Bank of Punjab, ACC and Tata Coffee counters.

On a day of hectic stock-specific activity on the bourses, housing finance company stocks flared up on expectations that the forthcoming Budget may allow foreign direct investment (FDI) in real estate.

The Bank of Punjab stock jumped 10.42 per cent today to a 52-week high of Rs 35.40 on rumours that a foreign bank may be moving in to take equity stake in the bank.

And speculation refused to die on the ACC counter. Despite Holcim's strong assertion that it would not raise the open offer price for ACC, the stock hit a high of Rs 373.20 in intra-day trades, before closing at Rs 369.60, up 1.12 per cent over Monday's close. More than 590,000 shares were traded on the Bombay Stock Exchange (BSE).

The ACC scrip had fallen to Rs 365.50 on Monday in the immediate reaction to Holcim's statements that it would not raise the open offer price.

Meanwhile, 4.32 per cent of the equity of Tata Coffee, a Tata Tea subsidiary, changed hands today in a block deal on the BSE. It is reliably learnt that Citigroup Global Markets has bought 539,000 shares at a price of around Rs 325 per share. The seller was the F Born AG, according to sources.

Expectations that the Budget will open up foreign direct investment in real estate boosted three housing finance stocks --- SBI Home Finance, LIC Housing Finance and Gruh Finance -- to their respective all-time highs.

SBI Home Finance jumped by Rs 5 to close at Rs 29, on volumes of over 1.8 million shares on the BSE and 2.9 million on the National Stock Exchange (NSE). This was against the average of 313,000 shares traded on this counter in the last two weeks.

Dewan Housing Finance's stock price jumped 14 per cent to Rs 40, while LIC Housing Finance and Gruh Finance, hit their all-time highs of Rs 225 and Rs 54.50 before closing slightly lower on Tuesday. The HDFC scrip also rallied by over 3 per cent to close at Rs 817.

Speculative interest in the housing finance stocks follows expectations that sops for home loans will continue.

"The fiscal incentives have helped create a housing boom in the country supplemented by the falling interest rates, which are the lowest in the market today," said senior officials with a leading housing finance company.

Talk of a foreign bank closing in on a new-generation private bank spurred the Bank of Punjab stock. The bank has appointed Ernst & Young to evaluate various options of raising capital to support its growth plans. In the last three trading sessions, the bank's stock price has gone up by 14.95 per cent. It closes at a 52-week high of Rs 39.20 today.

"Ernst & Young is expected to submit its report shortly," CR Sharma, managing director, Bank of Punjab, told Business Standard.

"Based on the recommendations of the consultant, the board will evaluate all options and take a final decision then," he added.

According to him, Bank of Punjab is open to investment by a foreign bank. However, it says it has not been approached by any foreign bank till now. At present, the bank is adequately capitalised, Sharma said, adding the bank was looking at raising funds to support growth plans.