06 November 2009

Heard on the street - ET

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Heard on the street

Suzlon comes back in style after a losing streak

Suzlon shares were among the biggest gainers on Thursday, rising over 13% to close at Rs 62.50, and snapping a eight-day losing streak that had prompted speculation of the company facing difficulties. The stock rose, even as the company informed stock exchanges that it had pledged additional shares with Indiabulls Financial Services, to which it owes roughly Rs 200 crore.

A person familiar with the development said additional shares had been pledged to provide for margin due to the 34% fall in stock price in less than two weeks. The shares were being hammered on talk that the company was struggling to refinance its foreign currency loans. The dramatic surge in the stock price on Thursday was driven by talk that the company has now managed to refinance close to Rs 10,000 crore of loans.

A leading state-owned bank is said to have provided the wind power company a fresh loan of $465 million. Have the bears called off their attack? Suzlon November futures closed at a slight premium to spot, with open interest rising 2.6%. This could indicate that in addition to covering of short positions, some fresh long positions too may have been initiated.

Bears were hammering the shares in the hope that the company would not be able to meet the margin requirement, thus prompting the lender to offload the pledged shares. While the company may have tided over its liquidity problems, bears seem to be taking heart in the weak operating performance, and are still hoping to rake a neat profit on their short positions.

MF has the last laugh after early fund erosion

EVEN as rivals rejoiced over the approximate Rs 2,000-crore fall in assets under management (AUM) of a leading fund house in October over the last month, officials in the mutual fund in question were actually celebrating. The industry buzz has it that the fund house held a party for its employees on Wednesday to celebrate a fresh inflow of a few thousand crores (sources say in the range of Rs 2,500-3 ,000 crore) into various debt schemes.

Ind-Barath Power to tap IPO market

HYDERABAD-BASED power generation company Ind-Barath Power Infra, which recently got $100-million funding from private equity funds Sequoia Capital and Bessermer Venture Partners, is planning to go public soon. According to an official privy to the development, the company has initiated talks with merchant bankers for the same.

The private equity firms together picked up more than 15% stake in the company, valuing it at over Rs 2,100 crore. This is the second round of private equity funding for the power generator, which has projects in Karnataka, Orissa, Maharashtra and Tamil Nadu. In 2007, Citi Ventures and UTI Ventures had invested Rs 300 crore in the company.

Contributed by Santosh Nair, Shailesh Menon & Reena Zachariah

Src: Economictimes.Indiatimes.com

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