Talk of a strategic buyer keen on a big block in Kelani Tyres saw the 16% stake held by high net worth investor Dr. T. Senthilverl mopped by the market on Friday.
Around 14.8 million shares or an 18.4% stake of Kelani Tyres changed hands via 2,972 trades, generating a turnover of Rs. 875 million. The stock traded between a high of Rs. 69 and a low of Rs. 58 before closing at Rs. 59, down by Rs. 5.90% or 9%, placing Kelani Tyre among the top 10 losers on Friday percentage wise.
The majority of the trading was on the 16% stake held by Dr. Senthilverl. Sources said that an impending deal that a group of investors promoted by Perpetual Capital was to buy the big stake at Rs. 55 per share had leaked, prompting massive interest.
Some parties wanting to either block the deal or drive the price up had quoted buy orders above the alleged deal price as confirmed by the Rs. 69 peak on Friday. Some were also planning to cash in if the deal went through, as several stocks bought by Perpetual Capital had risen by over 200% in recent months. Among them were Dimo, HDFC Bank, Ceylon Grain and Bairaha Farms.
Kelani Tyres recently reported a Rs. 207.5 million Group net profit for the nine months ended 31 December 2010, up from Rs. 145 million a year earlier. The figure almost equalled the Rs. 209 million full year profit achieved in the 2009/10 financial year.
Control of Kelani Tyres – Chairman of which is Chanaka De Silva – is held by Silverstock Ltd. (25.3%) and Avon Lanka Ltd. (16.3%).
source - www.ft.lk
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