MC Inside Edge: Silent clambers up Indus; Honey & Co try similar feat in Jyoti Structures, realty bulls turn cautious

Know what stock veteran bulls are eyeing, what the bears are ganging up against.

Second order effect

As Vodafone begins repaying the money it owes various parties, including the government, some HNIs have resumed loading up on shares of Indus Towers. The Silent Investor is said to be leading the charge of the bull brigade, having bought some more stock last week. It is not clear yet how much of Indus’s dues will be cleared by Vodafone in the foreseeable future.  Analysts are divided on the stock, with Kotak Institutional Equities recently downgrading the stock , and CLSA upgrading it. The other chatter that has been persistently doing the rounds that Vodafone Plc may shortly finalise the deal to sell a slice of its 21 percent stake in the company. All said, bulls appear to be getting excited about the stock based on what Indus’s stakeholders are likely to do. As the saying goes, Begaani shaadi mein Abdullah Deewana.

Lighting a fire

Bulls are trying to whip up action in EPC firm Jyoti Structures after the recent Rs 175 crore rights issue which was subscribed over 2 times. The darling of stock market operators and a handful of fund managers during the 2007 bull run, a series of missteps has resulted in the stock now quoting at one-tenth of its peak value. Interestingly, the rights issue got a strong response despite there being no visible promoter group. The bulls may argue that ICICI Bank, HDFC Bank, ITC and Larsen don’t have a promoter group either.

The Honey tongued fund manager turned ultra HNI is said to be among the big bulls in the stock, pitching it as a rerating story. He and his acolytes are said to have picked up a sizeable quantity in the rights issue. Honey is known to bet on ideas that many of his peers shun, but those looking to ride on his coattails could do well to bear in mind that it can sometimes be a long wait. For instance, Honey had written a fat cheque for the Indiabulls Housing rights issue too.

Plotting an exit

Operators are said to be trimming their positions in some of the realty names, as murmurs about cancellations in some of the NCR luxury projects are getting louder. Besides, the flurry of cold calls to promote new projects and the staggered payment schemes being announced by many developers in Mumbai, is also giving cause for anxiety. Industry experts say Mumbai numbers look optically better but a good chunk of the new registrations are for existing residents in buildings that are going in for redevelopment. The long term story may look good, but operators holding realty stocks wouldn’t mind a tactical retreat, which will also help them lower their average purchase price.