MC Insider: Steely stock, look who’s buying cement shares, the financier that said no to daddy, grumpy founder and more

Most steel stocks have been in a free fall over the past month, but this one managed to hold ground in a market hostile to anything with a metallic ring to it. Players were baffled by the sharp increase in the open interest (OI) in the current month futures. At first glance, it gave an impression of more traders being bullish than bearish on the stock. But some of the players tracking the stock suspect that the huge OI could be the outcome of a funding transaction. In such arrangements, informed circles sell shares to financiers and then take up long positions for an equivalent quantity in the futures segment. The counterparties for the futures trade are the same set of financiers to whom the informed circle had sold the shares. The difference between the futures price and the spot price is the interest due to the financiers.

The cement sector can’t be away from action after the recent moves by the big boys. Just that the nearly every stock has hit a rough patch. Which is why we were not surprised to hear that a clutch of influential investors are accumulating shares of a south-based cement company after recent the correction. Indeed, this company has long been a magnet for suitors looking to take over. Now with Industry consolidation being the buzzword, smaller cement players are the obvious targets.

A heavyweight PSU bank and some of the syndicate members are said to be nudging a gold loan financier to shore up its net worth by raising some more equity capital—just to be on the safer side. The gold loan financier is in no hurry for two reasons. One, it is adequately capitalised for now, and two, bearish calls on the sector by leading brokers may make potential investors wary of paying a premium.

Local bulls betting on a rerating of this state-owned fertiliser stock are still in a state of shock after the recent rollercoaster ride. After lagging the market throughout the pandemic rally, this stock slowly started showing signs of life in January this year, then soared between February and April, only to crash dramatically soon after. What we hear is that an armada of hedge funds had quietly moved into the stock a few months earlier. And while the FII holding in the stock doubled in three quarters, the new entrants managed to stay unnoticed as they all (by some coincidence) owned less than 1 percent of the stock. With the stock price having fallen off a cliff, the current quarter’s FII holdings would make for interesting reading.

Some offline brokers are said to be going the extra mile to ensure that their clients get the shares of ‘trade-to-trade’ (T2T) stocks even if the counterparty was unable to deliver them. Except that this arrangement benefits the broker more than the client. That is because the stock exchange rules penalise the seller who is not able to deliver the shares of a T2T stock. There is no auction system for undelivered T2T shares; instead, the seller has to pay a 20 percent penalty over the closing price and the amount is credited to the buying broker’s account, who then has to pass it to his client. Some clever brokers don’t inform their clients about the extra amount they stand to get, and instead source the shares at a lower rate somehow and credit those to the client’s account a day late, citing technical issues.

Fuel pumps in some locations have been running dry in recent weeks. Petrol Dealers have been warning since May that oil marketing companies have been cutting supplies to retail outlets to curb their losses, as the retail prices are significantly lower than what they should be to absorb the impact of the rise in crude oil prices. WhatsApp groups of dealers have been abuzz with complaints, especially about two state-run OMCs that have started rationing supplies to the pumps. The dealers allege that certain bigger dealers and well-connected dealers get the supply of time, while smaller one, especially in faroff areas, are struggling. While OMCs have denied rationing supplies, dealers have been circulating screenshots of WhatsApp messages from senior officials from OMCs that suggest otherwise. After the ministry pulled up the OMCs, they moved quickly to fix the matters. Senior officials told their local executives not to convey messages via text messages. Problem solved! As for the real problem, dealers said some pumps are still facing supply constraints.

The founder of this company we hear is becoming increasingly impatient, temperamental and testy, as his plans exactly haven't gone according to plan post a blockbuster listing. The shares of this firm have taken a beating amid concerns of growth, profitability, and an investment spree. So he has now taken to blaming the scourge of media and journalists for all his woes. Shooting the messenger is easier than showing returns for shareholders we guess!

Bank employee union leaders are typically vocal about the people issues in their respective organisations and play a key role in triggering public debates on organisational and systemic issues. They would reach out to the 'media friends' every now and then to highlight the employee problems and often manages to get their voice heard. So, was one such senior union office bearer who typically represents the employees of the Reserve Bank of India. But interestingly enough, the said person suddenly went quiet and inaccessible to the media a few months ago. No one knew why. It is learned that the silence was an outcome of a strict diktat from the top not to 'leak' information to the press about the HR issues at the organisation, after his seniors found out that the man was behind certain reports highlighting the prolonged HR issues in the bank. Of course, regulation begins at home!

The Central Bureau of Investigation’s (CBI) raid in the JDC office of CDSCO on Monday has sent the pharmaceutical companies into a tizzy. The CBI also cracked its whip on a private company claiming to provide regulatory clearance services for clinical trials during the raid. A little birdie told us that the pharmaceutical firms have now severed ties with the aforementioned company and are now looking out for alternatives. The private regulatory services firm is now left high and dry and will probably have to look for new clients.