Selloff fever grips six PSU stocks

Investor interest seems to have been revived in six public sector undertakings on the disinvestment list just two days before the Indian Petrochemicals Corporation (IPCL) offer for sale gets rolling.

Market value, volumes and deliveries in IPCL, Oil and Natural Gas Corporation (ONGC), IBP, GAIL, CMC and Dredging Corporation have increased substantially on February 18, 2004 but profit booking in some stocks led to delivery-based selling.

However, the buying interest did not spread to other PSU counters. While the turnover and delivery volumes in the six PSUs have more than doubled on February 18 compared with February 17, the turnover and delivery volumes of other PSUs declined by over 30 per cent each between these two days.

The IPCL scrip, for which the bidding started yesterday at a floor price is Rs 170 a share, saw its volumes surge five fold from around 10 lakh shares on February 18 to 52 lakh shares on February 18.

However, in January, the daily trading volumes averaged at 14 lakh shares and delivery volumes averaged around five lakh shares.

IPCL's delivery volumes rose 90 per cent to 6.93 lakh shares on February 18. The share price had gained 6.04 per cent on February 18 to close at Rs 191.90, commanding a premium of a 12.88 per cent over the floor price.

On February 19, trading and delivery volumes rose further to 123 lakh shares and 20 lakh shares, respectively. The price rose further to Rs 194.95, commanding premium of a 14.68 per cent over the floor price.

IBP, for which the offer opens on February 26, gained a modest 3 per cent on February 18 on account of 69 per cent rise in delivery volumes of 5,864 shares and trading volumes of 12,480 shares.

Prior to announcement of the public offer by the government, IBP saw a huge delivery volumes of 64,000 shares on February 10 at around Rs 723.

Today's 3.86 per cent decline in the IBP stock price on the BSE was on account of delivery-based selling by operators and investors.

The delivery volumes on the BSE and the NSE increased seven-fold to 39,797 shares and trading volumes jumped to 76,819 shares.

GAIL trading volumes and delivery volumes remained listless even after the announcement of its public offering.

The average daily trading volumes in Gail declined from 105 lakh shares in January to 71 lakh shares in the 12 trading days of February.

Its delivery volumes too declined from an average of 26 lakh shares in January to 11.56 lakh shares in February.

Gail whose stock price had soared to Rs 312 during the first week of January declined to Rs 190 on Janaury 22 on profit booking. The trading price band of GAIL remained between Rs 220 and Rs 230 in February.

ONGC, which is now trading at a 18 per cent discount to its all-time closing high of Rs 944.10 on January 8 also witnessed lack of buying interest in February.

The average daily volumes declined from 16.6 lakh shares in January to 10.4 lakh shares in February, while delivery volumes fell from 3.97 lakh shares to 2.29 lakh shares over the same period. CMC witnessed listless trading in January and February, except on February 18 and 19.

Delivery volumes, which averaged at aound 3,000-4,000 shares in the first fortnight of February, increased to 38,550 shares on February 18 and further to 41,000 shares on February 19. The stock has gained 8 per cent to Rs 573.40 in the last two days on account of delivery-based buying.

Dredging Corporation, where the government holds 98.56 per cent equity, has gained 10 per cent in February.

But trading volumes have been listless and the delivery volumes have ranged between 500 and 1,000 shares daily.