Monday, February 27, 2012

ABG Shipyard Sees More FII Buying, Deutsche Securities Buys for Rs. 20.38 crore

By Special Correspondent:

ABG Shipyard Ltd (BSE: 532682, NSE: ABGSHIP) on Monday had  a significant buy of 4.95 lakh shares by the FII, Deutsche Securities Mauritius Ltd, amounting to 0.97% of the total shares in the company.

This was disclosed by the institutional buyer’s brokerage firm in NSE, where the significant trade took place, and filed by NSE on Monday evening. 

Earlier, StockExplain had reported that another foreign institutional investor, Macquarie Bank, had bought 2.93 lakh shares or 0.58% of ABG Shipyard, on Friday, for Rs. 12.41 crore.

Interestingly, and as was the case on Friday, Monday’s buy in ABG Shipyard was not against any identifiable institutional sellers or promoters, which means that it was probably picked up by Deutsche Securities from the wider market.

While Macquarie Bank’s buy was executed at Rs. 423.64 a share, Deutsche Securities could pick up ABG at a slightly lower rate, at Rs. 411.84 a share, due to the Indian market tanking on Monday, with key indices losing by around 2.73%.

ABG Shipyard Ltd is India’s largest listed private sector shipyard by FY’11 sales. It specializes in ship building and repair works and has a clientele from many sectors in India including defense, and from many parts of the world. Its clients include oil support companies, fleet service providers, defense units like Indian Coast Guard, and industries in cement, steel etc.

Deutsche Securities Mauritius Ltd is a step-down subsidiary of Deutsche Bank Group, and is a leading FII in India.

Deutsche Bank is a global banking and financial services major, headquartered in Frankfurt, Germany. It has operations in over 70 countries, both in the developed and emerging markets. The bank offers financial products and services for corporate and institutional clients along with private and business clients. It is a leading foreign exchange dealer across the world, as well as a leading investment bank specializing in equity  and debt derivatives, some of which came in for heavy criticism post-2008 and caused it heavy losses.

Deutsche’s major stakes in India, percentage-wise, include, Asahi Infrastructure & Projects, Electrotherm (India), Maars Software International, India Infoline, Monnet Ispat, ORG Informatics, SKS Microfinance, Aksh Optifibre, Pennar Industries, Jubilant Industries, Federal Bank, and Nava Bharat Ventures. The FII holds upwards of 2% stake in these companies.

Besides these stakes, Deutsche arms hold 1-2% stake in around 14 listed Indian firms. Overall, Deutsche’s holdings in India include some good companies and some bets that have performed badly.

StockExplain had earlier reported on ABG Shipyard that, “It will be interesting to watch whether other FIIs will take a cue from Macquarie Bank’s entry.”

Monday’s entry by Deutsche Bank reveals that at least one FII has taken it as a cue.

Though FIIs hold 11.28% in ABG Shipyard, large presence by marquee names from the foreign institutional investor space were missing. 

Now, it will be interesting to watch whether other FIIs will take a cue from the entries made by Deutsche and Macquarie.

Major investors in ABG Shipyard include Religare Finvest, ICICI Prudential Life Insurance Company, India Fund Inc, Religare Securities, and Reliance Capital Trustee Company. Since the market has turned down a bit, it will be also interesting to watch whether any of these holders are selling now due to the good run-up in share price as well as the poor Q3 numbers.

In India, buyers and sellers are identified only if the stakes bought/sold are over 0.50% of the total number of shares in the company.

On Monday, despite Deutsche Bank’s buy, ABG Shipyard closed trade at Rs. 405.80  in NSE, down by 3.38%, which shows that there were eager sellers as well.

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