Street Signs

SMART EYE

One has to jog one's memory a long way back to figure out the last time there was such a frenzy over one company. The sordid saga of Reliance Industries and its group firms along with the main protagonists was just about the only news that interested the markets last week.

While power games raged in the back ground the group stocks were on a downward spiral. Save the sad story of a mighty company, there were plenty of good news floating around.

The Sensex touched its highest level in the past 10 months while frangipani inflows in to the country for a calendar year reached record levels.

Their continuing confidence in the country's economy and corporate sector has seen the cumulative inflow for 2004 crossing the Rs 31,000 crore mark, compared to the Rs 30,458 crore in 2003.

Another good thing is that despite the fall in Reliance stocks, the Sensex mostly ended up in the positive territory, which can be attributed to the declining weightage of Reliance Industries in the index. But for the shareholders of the company that is no consolation.

Et Tu Brutus? As if all the troubles of the past two weeks weren't enough, Reliance was dealt another body blow. Nosey Parker tells us that Gemini Fund, which has been a trusted supporter of the stock for so long, decided to sell off a major portion of their 1.65 per cent stake in Reliance Industries.

The sell-off (Gemini is rumoured to have made close to Rs 200 crore out of the deal) would have led to consternation in the markets even under normal circumstances.

The timing of the deal should hurt even more. Apparently, the fund had got wind of the brotherly squabble just before the general public came to know about it and decided to press the sell button immediately. Gemini's acquisition of nearly six crore Reliance shares a few years ago from the secondary markets represented one of the biggest investments by an foreign institutional investor in an Indian company at that time.

Now to add insult to injury comes the news that one group with multiple business interests, known to be close to the younger brother, has also decided to sell off some of its shares before it's too late. The lack of confidence of institutional investors is bound to trickle down to the general public as well, if not already.