Heard on the Street: Natco Pharma, Guar Futures

Natco Pharma raises Rs 67.5 cr via QIP

At a time when many companies are deferring their fund-raising plans, Natco Pharma has proved an exception to this trend, albeit unfavourable market conditions. The company has successfully completed the recent qualified institutional placement through which it raised Rs 67.5 crore at a price of Rs 225 a share.

Kotak Private Equity Fund, FII Asia Advantage, Principal Mutual Fund and Prudential ICICI Mutual Fund are believed to have invested through the offer which was managed by the Mumbai-based merchant banker Fortune Financial Services.

The company sold off the entire issue on December 7, the day on which the stock surged 15% to close at Rs 278.6 on the BSE. The euphoria in the counter was also attributed to the talk about acquisition of a minority stake by Sun Pharma promoter Dilip Shanghvi in the company. While the stock slipped on the subsequent days, it is still quoting at a premium to the QIP price.

NCDEX on alert as guar futures hit upper circuit

The commodity futures markets are in a tizzy over rising prices of guar futures, which have regularly hit the upper circuit since Monday, when the regulator announced a 10% special margin on longs, effective the next day. Prices over the past four days are up by 12.5%, more than the margin imposed, at Rs 6,552 per 100 kg despite the peak arrivals season getting under way.

Grapevine suggests a few investors have asked brokers to trade the product on their behalf in return for a fat commission so the buys can’t be traced back to them.

A broker said the investors were cornering the industrial commodity by buying it on the physical and futures market, thereby taking prices to unrealistic and unjustified levels. At such prices, exporters are having to pay through their noses to procure the commodity which is processed to make guar gum, a product used as a sealant by oil drillers.

Commodity futures regulator FMC has directed NCDEX, the exchange where the product is most liquid, to keep a tab on the top clients and members active on the counter. But that does not seem to be putting a lid on prices.