MC Inside Edge: Zee back in the limelight, Emperor takes a shine to Biocon, bulls face uphill task in Deepak Nitrite

The price band of the offer was fixed at Rs 48.

Smart money has burnt its fingers in Zee more than once, but that can’t stop them from fishing for bargains in the stock from time to time. Renowned value investor Howard Marks of Oaktree Capital believes that at a price every asset has some value to offer. Some of the big boys of Dalal Street agree. It is not clear if they are betting on Zee finding a new suitor. The stock has quietly climbed over 15 percent in the last couple of weeks. Among individual investors, the Midcap Mugul is learned to have picked up a sizeable chunk, and among PMS funds, the Calculator fund has been a buyer.

After a couple of well-known names on Dalal Street put the Biocon stock into a higher orbit with their heavy purchases, the tribe of believers appears to be growing. The stock is hovering around a 19-month high, and trading volumes of late have been higher than usual. The Emperor broking firm, known for its close ties with a leading corporate house is said to have been one of the big buyers in the stock. Not clear whom the Emperor is buying on behalf of, but then it is known to deal with the who’s who of market and corporate circles.

Bull operators in Deepak Nitrite are having a tough time supporting the stock at higher levels. The stock surged around 28 percent between mid-March and mid-May on chatter about the outlook for base chemicals improving. Domestic funds have been nibbling at the stock of late, but not in quantities that could help drive a rerating. March quarter numbers were tepid, and the company said it expects things to start looking up only from the second half of this year. Given the prolonged underperformance of the stock, some of the impatient investors are using every rise to book profits. Ideally, market starts discounting a turnaround or reversal in earnings a couple of quarters in advance. But with chemical stocks in general, it appears to have become a case too many times bitten, many more times shy.

Massive call writing in 2400 strike in Deepak Nitrite indicates that the stock could most likely be under pressure for at least the current expiry.