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Friday, December 28, 2007

Post-block deal: Are HOEC, Amtek India a buy?

Rakesh and Rekha Jhunjhunwala have sold 4.47% stake in HOEC yesterday, reports CNBC-TV18's Nimesh Shah. Rakesh Jhunjhunwala sold 10.35 lakh shares, or 1.32%, at Rs 168.80 per share. Rekha Jhunjhunwala sold 24.71 lakh shares at Rs 169.07 per share. She has reduced her stake from 3.9% to 0.75%. Matterhorn acquired 35 lakh shares at Rs 169 per share.

 

There is an interesting angle to play this stock ahead of the rights issue, which is going to close next week, he said. HOEC plans to raise Rs 615 crore via the rights issue. The rights issue is priced at Rs 117 per share and is in the ratio of two shares for every three held.

 

Investors, that have been holding this stock for a while and who are sitting on good amount of profits can sell the current shares and apply in the rights issue at Rs 117 per share, he said. So, this is possibly the play, which a large number of investors are following in HOEC, ahead of the rights issue.

 

The other stock which deserves a mention is Amtek India , he said. Warburg Pincus has bought another 29 lakh shares at Rs 203.98 per share. The stock has been in the radar of Warburg Pincus for the last few months. Earlier in October, they bought 4% in this company. After yesterday's block deal, the company's stake in Amtek India goes close to 9.5%. Incidentally, Bluecrest Fund sold 29 lakh shares at Rs 203.90 per share.

 

Warburg Pincus is known as an investor who buys stocks at lower levels, Shah said. These stocks in turn go on to become future multi-baggers.

 

These are the two stocks which investors need to watch out for, he said. First, HOEC for the rights issue play. Second, going forward, there is going to be a merger of Amtek Auto and Amtek India. So, that could be a bigger play to watch out for. These are two stocks which look interesting post yesterday's block deal, he added.