Heard on the street

Heard on the street 14 Jan 2010, 0356 hrs IST, ET Bureau

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Scooters India seen riding the divestment wave A group of punters appear to have taken control of the Scooters India stock. Shares of the loss-making public sector undertaking (PSU) hit a 52-week high of Rs 45.45, amid a sudden surge in volumes, and ended the day at Rs 44, up 14% over the previous close. Around 13.6 lakh shares changed hands on Wednesday, compared to an average daily volume of around 8,000 shares on most trading sessions in the past three months. The stock has risen nearly 60% this month alone. Cornering the stock does not need too much capital, considering that the non-promoter holding in the company is barely 20 lakh shares. With divestment being the flavour of the season, PSU shares are suddenly in demand. It is not too difficult for an operator to whip up volumes in an illiquid stock and then unload the shares to the unsuspecting public by spreading the divestment story. There were more than a dozen bulk deals in the stock on Wednesday, with all of them being squared off before close of trading. The sudden interest in the stock by arbitrageurs does raise eyebrows, considering the illiquid nature of the stock. Of the 13 players who took up positions at the counter, 8 squared off their positions for a small loss, two barely managed to break even, and four made a small profit. Scooters India made a net loss of Rs 2.27 crore for FY09, and a net loss of Rs 1.2 crore for the half year ended September 2009. Alarm bells ringing for second-rung stocks IS THE rally in second-line stocks close to peaking out? Yes, say some dealers, pointing out to the fact that money-making is becoming a bit too easy. “We get at least half-a-dozen tips daily with likely price targets over the next few days,” says a dealer at an institutional brokerage. “But, of late, the target prices are being attained before the specified period. That is too fast for comfort,” he says. NTPC follow-on offer may open on Feb 3 THE FOLLOW-ON public offering of NTPC is likely to start from February 3-5, according to people involved with the process. The company along with government officials and bankers has started meeting domestic institutional investors including insurance companies and mutual funds to gauge investor appetite for the Rs-11,000 crore share sale. The company filed its offer document with Sebi on Tuesday and is likely to be flexible in the new auction process by not placing any cap either in terms of the number of shares or percentage to issued capital. Investment bankers say that the success of the NTPC issue will play a crucial role in the government’s future disinvestment plan. Contributed by Santosh Nair & Reena Zachariah Src:ET