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More mystery buyers on bourses

Deepak Korgaonkar

The Zaveri family may not be the only one making mystery purchases on the Indian bourses.

As many as 125 entities -- individuals, groups of individuals, companies, etc -- have disclosed substantial purchases of shares of 50 companies between January and March 2002.

These acquirers duly informed the Bombay Stock Exchange of their purchases after acquiring stakes ranging from 0.01 per cent to 71.88 per cent, the latter being a buyout deal. These mystery buyers have acquired shares of 50 companies at an aggregate price of Rs 1.394 billion.

According to market sources, there are several reasons why so many people have ventured to buy bulk lots in companies.

Some purchases may be with the express consent of existing promoters, in which case the purchase basically strengthens the existing management hands.

But in some cases, the buyers have been value investors who see a lot of hidden potential in a stock, even if it is ruling low today.

In some cases, the current promoters have used the opportunity of low prices to increase their stake to impregnable levels.

For instance, V G Udeshi, chairman of Jayant Agro Organics informed the BSE on March 26 that he had purchased an additional 35.93 per cent stake in the company to raise his stake to 73.71 per cent. The value of the deal is not known.

But based on the market price of company's shares on March 26, the deal can be estimated at Rs 156.65 million.

Madhudevi Saraf informed the BSE that she had bought a 5.11 per cent stake in Aftek Infosys on February 27, 02.

Madhudevi is estimated to have spent around Rs 127.5 million at a price of Rs 415. A month later, the Aftek Infosys share price climbed to around Rs 500.

India's biggest terms lending financial institution, ICICI informed the BSE on February 2 that they have bought 7.27 per cent stake in George Williamson at an estimated value at Rs 84.5 million.

The employees trust of Hical Limited decided to buy a stake in the company they work for. They informed the BSE on April 14 that they have bought 5.57 per cent stake in Hical at estimated cost of Rs 57.8 billion.

The cost of acquisition has been estimated on the market price on the date on which the employees trust informed the BSE.

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