MC Inside Edge: Operators gear up for second innings in GNFC, Biocon finds new believers, broker hardsells airport play

Small cap schemes of some of the domestic mutual funds have warmed up to the stock of late

A fertile idea

A group of Gujarat-based operators is having another go at the GNFC stock. Trading volumes have been higher than usual over the last couple of trading sessions. Operating numbers over the past few quarters are not all that great, but this is a market starved for ideas. But the operators will need a new set of believers this time after the pump-and-dump of two years back. The stock jumped 2.8x between August 2021 and April 2022, and then slumped 34 percent over the next three months. Since then, there have been quite a few ups and downs, but the stock never came anywhere close to the peak hit in April 2022. One difference is that small cap schemes of some of the domestic mutual funds have warmed up to the stock of late, the Icy Icy fund being one of the notable names. F&O volumes in GNFC stock have been ticking up of late. Most likely a dress rehearsal to get arbitrage funds interested as well.

Booster shot?

Biocon shares are steadily making new highs. The Midcap Mugul and Calculator fund kicked off action in the stock last month. Not long after, the Emperor brokerage picked up a sizeable chunk on behalf of its clients. Latest chatter is that some worthies from the bureaucratic circles too are taking interest in the stock. The bet here seems to be that even if the company manages one major success in its biosimilars pipeline, it could trigger a re-rating. But players looking to ride the coattails of big name investors should be mindful that it could be a long waiting game as well. Remember, the stock has not delivered meaningful returns for almost 8 years now.

Take off point

A leading foreign broker that recently came out with a buy recommendation on GMR Airports seems to be sparing no opportunity to hard sell the stock to potential clients. In a recent report, the broker mentioned a line that GMR had the most enquiries at an investor conference it (the broker) had hosted in New York. As this diarist mentioned earlier, good valuations for existing airport players strengthens the case for other airport operators looking to go public in the not-so-distant future. Any guesses which one?