Heard on the Street: Top insurer sells shares in D-Street favourite SBI

State Bank of India (SBI) remained a favourite among investors on Thursday, despite concerns over hardening interest rates.

According to the market buzz, there was some churn in the stock among foreign institutional investors, driving up the stock by 2.3% to Rs 2,356.75 on higher-than-average volumes in a firm market on Thursday.

But domestic institutions took a contrarian view on the stock, as it is felt that upsides are likely to be limited from these levels. Brokers said an insurance major was a seller in the stock on Thursday.

It is also speculated that the stock has been accumulated by a group of operators as a trading bet in the near-term. The stock is expected to outperform other bank stocks, brokers said.

Vadilal Inds gains 13% as takeover talk triggers rally

Shares of Vadilal Industries, a dairy product and food-processing company, have risen over 40% in less than two weeks, on market talk that the company could be a possible acquisition target for any large FMCG player looking to consolidate its position in the sector.

On Thursday, the stock rose 13% to close at Rs 144.95, after hitting a 52-week high of Rs 149 intra-day. Vadilal Industries’ revenues have improved steadily over the past few years, helping it gain a decent market share in milk and dairy products segments.

Dealers tracking the counter rule out the possibility of a hostile takeover, since the promoters own 61% in the company.

The company reported an earnings per share of Rs 8 for FY10. While the share price has more than trebled over the past one year, institutional investors have not shown any interest so far.

(Contributed by Nishanth Vasudevan & Vijay Gurav)