Heard on the street

GMR promoter on buying spree


Promoters of an increasing number of companies have got into the buying mode after Sebi has allowed them to increase stake beyond 55% through the creeping-acquisition route.

GMR Infrastructure is the latest example where promoters went on a buying spree last week, even as the outlook on the economy remains bleak.

On Friday, GMR Holdings, the key promoter of GMR Infrastructure, acquired an additional 14 lakh shares to raise its stake to 73.3% in the company.

The GMR Infrastructure stock has taken a major hit, plummeting 80% from a high of Rs 263 on December 5, 2007 to Rs 52 on Tuesday.

In October, Sebi said promoters can raise their stake up to 75% instead of the earlier limit of 55% by purchasing 5% equity every year under the creeping acquisition route.

Subsequent to this, more and more promoters are seen making open-market acquisitions with an intention to firm up their grips on the respective companies, according to analysts.

Terror strikes spruce up interest in defence stocks

Brokers are prodding investors to buy defence-related stocks on expectations that the government will increase defence spending, thanks to the recent terror strikes in Mumbai.

Astra Microwave, Zen Technologies and Bharat Electronics (BEL) are likely to benefit greatly if the government decides to increase its defence budget, brokers opine.

Moreover, the mandatory clause to include Indian firms in projects (for Indian defence forces) that are handed over to foreign defence companies assure a steady order book for Indian companies.

BEL, a public sector utility company, is the largest-listed defence equipment company in India.

���We are going to see increasing tie-ups between BEL and the US defence market, as well as the Israeli defence market,��� an analyst opined.

Zen Technologies is a company that produces simulators to train various police, military and para-military forces; Astra Microwave makes sub-systems for India���s missile programme.

BEL ended 7% higher at Rs 617; Zen Technologies closed nearly 10% higher at Rs 98 while Astra Microwave ended 3% higher at Rs 44 on BSE.


Contributed by Vijay Gurav & Shailesh Menon