Pilani, Vardhman: Here's why shares of Holding firms rallied up to 20%

Market regulator, the Sebi on Thursday announced a framework for special call auctions with no price bands for price discovery of investment holding companies.

Shares of holding and investment companies zoomed up to 20 per cent and were trading at their 52-week week highs on the BSE in Monday’s intra-day trade in an otherwise subdued market.

Pilani Investment and Industries Corporation (Rs 4,799.95), Kalyani Investment Company (Rs 5,926.70) and Vardhman Holdings (Rs 4,065.05) were frozen at the 20 per cent upper circuit on the BSE at 11:02 am. BF Investment, Nalwa Sons Investment, JSW Holdings and Maharashtra Scooters were up in the range of 10 per cent to 17 per cent. In comparison, the BSE Sensex was up 0.14 per cent at 77,317.

The market regulator, the Securities and Exchange Board of India (Sebi), on Thursday announced a framework for special call auctions with no price bands for price discovery of investment holding companies.

 

Holding companies, or holdcos, do not have operations of their own but hold stakes in other assets including shares of other listed companies. These firms mostly hold investments in their own group companies. There are nearly 70 listed holdcos in the Indian market. These typically trade at a higher discount than the intrinsic value of their holdings. Sebi’s new framework tries to address this gap, the Business Standard reported. CLICK HERE FOR FULL REPORT

Among individual stocks, Pilani Investments hit a record high of Rs 4,799.85, as it was locked at the 20 per cent upper circuit on the BSE. The main business of the company is investment and financing activity and all these activities are carried out within India.

Pilani Investment holds significant investments in equity shares of various diversified companies like Century Textiles and Industries, Grasim Industries, Hindalco Industries, UltraTech Cement, Vodafone Idea, Kesoram Industries etc. Therefore, the business prospects of the company largely depend on the business prospects and performance of its investee companies.

Vardhman Holdings is a non-banking finance company (NBFC) registered with the Reserve Bank of India (RBI) and mainly engaged in investment activities. It follows a strategy of adopting a systematic approach to investment into different asset classes and keeping the portfolio dynamic as per the changing market conditions.

Kalyani Investment is a Core Investment Company holding more than 60 per cent of its net assets in the form of investments in equity capital of the Kalyani Group Companies, while more than 90 per cent of its net assets are in the form of investments in equity / preference shares or debentures / debts of Kalyani Group Companies.

Shares of Kalyani Investment hit a new high of Rs 5,926.70, zooming 20 per cent today. In past two trading days, the stock has rallied 25 per cent.