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Aban Offshore falls 50% from high

2008-03-25 11:56:19 Source : Bazaar/CNBC-TV18

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CNBC-TV18�s Executive Editor, Udayan Mukherjee - It is an aberration, the fact that an Aban Offshore fell by Rs 500 in a single trading session. Somebody must have had to sell or offload that stock, I can think of no other reason.

Now can I predict -whether that same guy because Aban Offshore is not typically the stock, which trades million of shares everyday. Does he need to clean off another million shares of Aban Offshore? If that can the stock go to Rs 2,000, sure it could that one cannot predict. But as you said the stock has fallen 50% from its high of Rs 5,400. I know that there are some concerns about the large debt, which they had taken on their books for that acquisition.

There are some lingering fears of over capacity in the rigs or jackup rigs market. I suspect that if the company does Rs 400 earnings per share next year, as it�s likely; it is trading at 6.5-times next year�s earnings. It�s your premier exposure to the offshore business and one of the larger offshore players in the world. I think there are aberrations, which are beginning to happen. I don�t know about the Sensex and Nifty where they can go and eventually stabilize.

In some of these interesting midcap kind of plays, which you liked earlier but maybe the valuations were very expensive, they are giving these kind of aberration opportunities. So again it is difficult to put a hand on your heart and say how much they can fall because in the near-term everything is a question of demand and supply. But in some of these good quality plays you are seeing price aberration, which might be capitalized on.