Friday, August 17, 2012

Claris Lifesciences Bought by Morgan Stanley


Arjun S Handa,
MD & CEO, Claris Lifesciences Ltd.

By Ram NN, Assistant Editor:
Friday, 17th August 2012, 09:54 PM IST:

Claris Lifesciences Ltd (BSE: 533288) counter in BSE, on Friday, continued to witness buying momentum, with the leading FII, Morgan Stanley Asia (Singapore) Pte buying 5 lakh shares.

The deal was disclosed at Bombay Stock Exchange after trading closed for the week.

As per the latest Share Holding Pattern (SHP) available, for the June quarter, no Morgan Stanley arms were identifiably large investors in Claris Lifesciences.

On Friday, this noted Foreign Institutional Investor invested Rs. 10.89 crore, to pick up a significant 0.78% stake in the leading sterile injectables player, at Rs. 217.89 a share.

There were no identifiably large seller in the counter on Friiday,  unlike in several previous high-volume sessions, when one promoter group entity, Aditya S Handa was continually offloading his stake.

As reported by StockExplain News on four such occasions during the past four months, all the promoter sells were well-absorbed by institutional buys by well-known investors like Barclays and IHAG Privatbank, as well as pharma focused PE funds like Signet Healthcare.

The pharma stock is now up by over 34% since we reported the initial buy by Barclays.

The buy cue for Morgan Stanley was obviously Thursday’s Close-Out Letter to Claris by US FDA, which revealed that the American drugs regulator is satisfied with the corrective actions taken by the parenteral firm in recent months.

Despite rallying and closing up by nearly 20% on Thursday, there was not much fatigue visible in the Claris counter on Friday. After an initial brief dip, the scrip traded up throughout and managed to close up by 5.14%.

Despite no other identifiable buyer or seller, hectic trading activity was visible from the volumes as well as the pull-back from the day’s high. While volumes shot up 7.5 times of 30-Day Average levels, the scrip went as high as 8.21% intraday before pulling back.

While around half of the volumes were due to day trades, as seen from the 50.05% deliverables-to-traded ratio, the volume surge was still substantial showing that there was enough real buyers and sellers for Claris.

However, the large number of trades, and the relatively small size of the average trade hints that it was retail investor interest that caused the surge, on both buy and sell side, apart from the large buy by Morgan Stanley.

In a not directly related development, Aditya S Handa today disclosed at BSE that he had recently revoked 12 lakh shares that he had pledged with IDBI Trusteeship Services Ltd. 

As per June quarter SHP, 67.19% of his 10.50% direct stake was under pledge. He has sold off nearly half of this stake during the last four months, most of it when the US FDA clearance was still in an ambiguous status.

This member of the promoter family and Non-Executive Director of Claris, who is having business interests outside of the pharma major, is still likely to hold a 5.29% direct stake in the company. Friday’s disclosure puts his unencumbered stake at 1.04%.

Though US FDA clearance and eventual sales boost from US bodes well for Claris, with a positive re-rating process, which is already on in the counter, short-term momentum will also depend upon whether there are follow-up buys from institutional investors and on whether sellers like Aditya Handa would again resort to selling after a brief pause.

On Friday, Claris Lifesciences closed trade in BSE at Rs. 217.65, up by 5.14%, whereas BSE Sensex closed flat, up by only 0.19%.