Friday, February 24, 2012

Sintex Sees Sell by the FII, Macquarie Bank, for Rs. 16.42 Crore



Sunil Kanojia,
Group President, Sintex

By Staff Reporter

Sintex Industries Ltd (BSE: 502742, NSE: SINTEX) counter witnessed a massive sell of 18.28 lakh shares on Thursday, amounting to 0.67% of the total shares in the company. The sell was executed at NSE at a price of Rs. 89.81 a share, making the total deal value at Rs. 16.42 crore.

StockExplain had reported on February 3rd that Sintex was seeing hectic buying activity by FIIs like Morgan Stanley and AshmoreEMM, and earlier by Goldman Sachs. But the buys were being done at a relatively high level from the 52-Week Lows, and we had reported that, “…it remains to be seen whether the Sintex counter can maintain its momentum as it has already run up nearly 80% in less than one and a half months time.”

Thursday’s significant sell by Macquarie Bank shows that not all FIIs are not toeing the same line on Sintex Industries. 

Goldman Sachs’ Sintex buy had come at Rs. 73.46, AshmoreEMM had bought at Rs. 90.90, and Morgan Stanley had bought at Rs. 92.49.

Post Morgan Stanley’s buy, Sintex had rallied up to Rs. 104.60 in BSE, where it met significant resistance and has since then been tumbling. On Thursday, it closed at Rs. 89.95, slightly higher than Macquarie’s sell, but still down by 2.60% from previous close in BSE.

Interestingly, the significant sell of Sintex by Macquarie Bank on Thursday was not against any buying by any identified institutions or promoters, but probably picked up by the wider market.

Sintex is one of the leading manufacturers of plastics, concrete, and niche textile-related products in India. With operations spanning several countries, Sintex has a presence in the European, American, African, and Asian markets including countries like France, Germany and USA. Its plastics manufacturing spans two business segments - building products and custom mouldings, while its concrete manufacturing addresses building products including monoliths used in mass housing. In textiles, it is a leading manufacturer of corduroys. 

Macquarie Bank Ltd, is part of the Australian financial services major Macquarie Group, which  is a leading provider of banking, financial, advisory, investment, and funds management services. Macquarie Group Ltd is publicly listed (ASX:MQG), and is Australia’s largest investment bank as well as largest M&A advisor. In Indian capital markets, Macquarie Bank Ltd is one of the 14 FII accounts and sub-accounts of the Macquarie Group.

Apart from the market reaching a short-term high and retracing, another sell cue for Macquarie Bank seems to be management’s recent disclosure that in view of the $100 million they need to raise by way of new debt, apart from cash on their books, to redeem FCCBs, they will be going slow on capex plans.

There are chances that Thursday’s sell is a full exit by Macquarie Bank, as it was not holding more than 1% shares as on Q3 end.

It will be interesting to watch the decisions other large investors in Sintex would take in the coming days and weeks. Other notable institutional holders in Sintex, as per Q3 SHP, include Sloane Robinson, Reliance Capital Trustee Company, Merrill Lynch, ICICI Prudential Life Insurance, BNY Mellon, LIC of India, Government of Singapore, Reliance Life Insurance, Bajaj Holdings & Investments, India Capital Fund, and Aviva Life Insurance. As of Q3, Sintex has an impressive FII holding of nearly 31% and DII holding of around 9%.

Sintex Industries opened slightly up on Friday in NSE, but is now trading at Rs. 88.10, down by 1.95.% from Thursday’s close.


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