Wednesday, October 23, 2013


Sintex stock is up 72% this month and what is truly amazing is that the stock has started to rally right after 30th September, which is end of the quarter. So what exactly happened in Q2 and what has happened since?

I am just looking at the recent shareholding pattern changes. In quarter ending September 30th, FIIs hold 3.7 crore shares or 11.82% of equity, which is remarkably lower than 7.8 crore shares or 24.8% of equity they held at the end of June quarter. And what really amazes me is that this was not bought by either mutual funds or other domestic financial institutions whose total shareholding is almost flat between quarters. And the promoter shareholding didn’t change as well – so who really bought?

The non-promoter, non-institution shareholding is up sharply to over 40% vs little over 27%. In fact individuals now own 8.3 crore shares vs 5.5 crore shares. But what is really perplexing is the category called “Bodies corporate” – Their shareholding is up to 4 crore shares vs 2.8 crore shares. That’s a jump from 8.9% to 12.9%.

Who are these corporate bodies and individuals? None of them holds over 1% stake and hence it’s not shown in the breakup of shareholding pattern, but if the grapevine is to be believed, we have seen a lot of smart/informed buying by certain blue blooded investors (Also, this at times has been disguised promoter buying but we cannot infer that in every case)

By the way, promoters also bought 25 lakh shares between October 17 and 18 and they made a proper disclosure to that effect. From those levels, the stock is up 50%!!!

Now Q2 numbers looked good for Sintex, but the balance sheet is still in a mess. In fact from the same shareholding pattern, you see Bank Of Newyork holding 10.2 cr shares as a trustee for $140 m FCCB due in 2017. Now 10.2 crore shares are worth 350 crores and $140 m FCCB amount to Rs 870 crores. So there is still a lot of risk that this company is carrying.

What to do now with the stock? Well, if you managed to get in early, there is no harm in booking say 35-40% of your holding which might cover your entire costs and make some money as well and ride the rest with a strict trailing stop loss. But if you have missed the bus, wait for the next bus – don’t try to catch this one.

Note: This article was first published on

1 comment:

  1. I am following since quite some time now and it's sheer pleasure to listen your commentary during the market hours. Especially at 8 A.M with your colleague !! You've been spot on not only with your call during Muharat trading of Nifty fizzling out but at many instances!

    Keep on the good work! It's a pleasure gaining knowledge!