Tuesday, June 12, 2012

CEBBCO Sold by India Max Investment Fund

Dr. Kailash Gupta,
Chairman & Managing Director, CEBBCO Ltd.

By Staff Reporter:

09:10 PM IST, Tuesday, 12th June 2012:

Commercial Engineers & Body Builders Company Ltd (BSE: 533272, NSE: CEBBCO) counter in BSE, on Tuesday, witnessed a major sell of 3.54 lakh shares by the FII sub-account, India Max Investment Fund Ltd.

The transaction was disclosed after trading hours on Tuesday, at Bombay Stock Exchange.

On Monday, StockExplain had reported on a larger sell-off in CEBBCO counter by another FII, New York Life Investment Management India Fund, of over 12 lakh shares.

StockExplain’s reporting that Monday’s offloading signalled a full exit strategy was confirmed when New York Life Investment Management disclosed at Indian exchanges on Tuesday that it is no longer holding any CEBBCO shares.

However, for India Max Investment Fund, Tuesday’s sell is only a partial exit of 0.64% stake, while as per the latest available Share Holding Pattern (SHP), it held 3.64% stake. The FII has not disclosed any transactions in CEBBCO stock since the publication of last SHP.

While New York Life’s sell was partly absorbed by identified buyers on Monday, there were no identified buyers for Tuesday’s sell by India Max Investment.

On Tuesday, the scrip rose in early trade, but soon lost ground, however rebounding again during the closing hours, to close the day up by 0.62% in BSE which witnessed higher volumes for CEBBCO than in NSE.

India Max Investment Fund Ltd is registered as a sub-account under the FII, Rahn & Bodmer Company, which is a Swiss private bank specializing in investment advice, asset management, and securities trading.

The exits by NYLIM and India Max have cast doubts on whether the current rally in CEBBCO, which has been largely intact since October, can continue any more with the same momentum. The concern is that reasonable valuations have already been breached, and further direction will be set only by the Q1 numbers.

As StockExplain reported earlier, though the turnaround in FY’12 was impressive, sequential topline growth in the most recent fourth quarter has turned sluggish.

While NYLIM which exited totally on Monday was its largest shareholder, India Max Investment was CEBBCO’s third-largest investor. 

Currently, Tata Capital Growth Fund I is the largest shareholder in this commercial vehicle and locomotive body builder. However, Tata’s 10.93% stake is dulled by the close business relationship between Tata Motors and CEBBCO.

On Tuesday, Commercial Engineers & Body Builders Company closed trade in BSE at Rs. 73.60.