Tuesday, April 10, 2012

Jyoti Structures Bought by Reliance Life Insurance for Rs. 10.38 Crore

By Staff Reporter:

Jyoti Structures Ltd (BSE: 513250, NSE: JYOTISTRUC) on Tuesday, 10th April, witnessed significant buys in both NSE and BSE by Reliance Life Insurance Company Ltd.

Reliance Life Insurance bought 12.13 lakh shares in National Stock Exchange and 12 lakh shares in Bombay Stock Exchange, both at Rs. 43 a share.

Both deals combined, the private sector life insurance major has acquired a significant 2.94% stake in the power transmission sector contractor.

Already, other arms of Reliance ADA Group were holding significant stakes in Jyoti Structures Ltd (JSL). Reliance Capital Trustee Company has been the largest non-promoter shareholder in the company with a 6.23% stake.

Two of Reliance Capital Trustee’s funds, Reliance Diversified Power Sector Fund and Reliance Small Cap Fund own this stake at 5.08% and 1.15% respectively.

With Tuesday’s buy, Reliance ADA Group’s combined stake has risen to a massive 9.17%.

Apart from its turnkey and EPC operations in India, JSL through its various direct and indirect subsidiaries have similar operations in USA, Africa, & Middle East. 

On the fundamental side, standalone Jyoti Structures had grown its revenue by a modest 12.27% during the first nine months of FY’12, but its net profit had dipped by 18.22% in the same period.

Reflecting this struggle, its stock had lost ground for most periods in the year-to-date, falling from a 52-Week High of Rs. 98 in BSE on 19th April 2011 to a 52-Week Low of Rs. 35.05 on 22nd December - which was a massive fall of 64.24% within 8 months.

Jyoti Structures recovered to an extent with the general market rise, but soon lost its steam again, but narrowly missing the marking of a new 52-Week Low recently.

Reliance Life’s identified buy on Monday has come in after a mild rebound from this recent low. There were no identifiable or large sellers from among institutional investors or promoters as counterparties to this buy.

Jyoti’s promoter holding is already relatively low at 27.75%. But the institutional holding is high at 34.74%, dominated by DIIs with a 26.64% stake. 

Apart from Reliance ADAG companies, major institutional holders are Birla Sun Life Insurance, SBI Mutual Fund, LTI Infrastructure Fund, Comgest Growth, DSP Blackrock, LIC Of India, SBI Life Insurance, Tata Mutual Fund, Amiral Gestion SA A/C Sextant Autour Du Monde, Tata Offshore India Opportunities Scheme, TATA AIG Insurance, Union Investment Luxembourg, and Tata Indo Global Infrastructure Fund.

The buy cues for Reliance Life seems to be the beaten down condition of the stock, as well as the recent momentum exhibited by the company. Its various projects are progressing satisfactorily. On Monday, Jyoti Structures awarded a Rs. 74 crore order to Alstom India, which will form part of JSL’s project implementations for state-run Power Grid Corporation Ltd.

Earlier, the company had announced successful testing of equipments for its Indian client Madhya Pradesh Power Transmission Company Ltd (MPPTCL) and for a contract in Arizona, USA.

Jyoti Structures rallied smartly on Monday, closing trade in NSE at Rs. 45.75, up by 6.64%, which shows that selling pressure was relatively low in the counter.

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