Bear of the Day: Stock that halved in 3 months

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Bear of the Day: Stock that halved in 3 months

A realty developer, Unitech gained 5.11% or Rs 2.20 to end at Rs 45.25 on the BSE. It touched an intraday high of Rs 47.15 and an intraday low of Rs 43.65. There were pending buy orders of 936 shares, with no sellers available. The total traded volumes were of 13,545,441 shares.

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Unitech BSE | NSE 30/05/12 Are Mutual Funds betting on Unitech? Other Stocks in this news Jaiprakash Associates | GMR Infrastructure | Lanco Infratech | Jaypee Infratech | IRB Infrastructure Developers | ILandFS Transportation Networks | Era Infra Engineering | NCC | Hindustan Construction Company | DLF | Oberoi Realty | Housing Development and Infrastructure | Indiabulls Real Estate |

News on credit repayment gave shares of realty developer Unitech a much needed shot in the arm as it gained 5.11% or Rs 2.20 to end at Rs 45.25 on the BSE today. The company announced today that it has repaid Rs 50.6 crore to creditors from whom they had raised close to Rs 250 crore by pledging their shares about a year ago. The stock touched an intraday high of Rs 47.15 and an intraday low of Rs 43.65. There were pending buy orders of 936 shares, with no sellers available. The total traded volumes were of 13,545,441 shares. The share had plunged 49.27% over the last three months.

The BSE Realty Index today was up 2.4% at 2,189.97. The stock touched its 52-week high of Rs 98.45 and 52-week low Rs 42.35 on 07 Oct, 2010 and 01 Feb, 2011, respectively.Its market capitalisation stands at Rs 11,838.76 crore.

Unitech, had to rush to the Delhi High Court over the weekend to get an injunction against lenders selling the promoters pledged shares.

Last year Rs 178 crore had been raised via debentures, with repayment due this may. But with the stock falling below Rs 60, the lenders wanted to sell the pledged shares.

Unitech promoters told the Delhi high court that the lenders were going against the agreement as ample notice for such a move is a pre -requirement.

The promoters are expected to pay 50% of the Rs 178 crore to lenders this week and the rest by next week. Its exposures to such debentures is worth Rs 250 crore.

What analysts say?

Sandeep J Shah, CEO of Sampriti Capital said, "We are still in a sharp or a strong bull market correction phase. In this environment you don't want to chase the high beta including the property stocks though I still maintain that I don't think there is - from a valuation perspective - significant downside. But stocks can get not just cheap but dirt cheap, throwaway prices before they bottom out."

He further added, "Just because the stock is cheap or is not expensive is not a good reason for it not to sell off and Unitech has its share of problems on the telecom side. On the property side, there are a host of issues which are coming up. So caution could be a better word here. You want to sit it out and you don't want to do anything here in this market. There will be ample opportunity and ample time to buy stocks when the timing is right. So as far as Unitech is concerned I will just sit it out."

Mitesh Thacker, Technical Analyst, miteshthacker.com said, "Infact a couple of days back, I was talking about and I was looking at exploring some kind of positive opportunities in real estate in the sense that there were signals of intraday bottoms being formed but then once those bottoms were taken out we saw very strong fall."

He further added, "I am not sure where Unitech will bottom out. But I think there is no serious accumulation happening over here. The speed of the fall is very high, and so you might keep getting bounce backs over here. But I think it is a clear-cut lower top, lower bottom formation going on. I would probably stay away from Unitech at the moment."

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