Aban Offshore rises 26% in two days

Us-Iran nuclear deal drives the uptick in company's shares

After having hit the upper circuit of 20% on Monday, the stock price of Aban Offshore was up another 6% during morning trade today.

Aban Offshore closed at Rs 360.20 per share on Monday, up 19.9% from its previous close.

Analysts said that the company was riding the US-Iran nuclear deal wave in the hopes that the exploration business would receive a boost once sanctions on Iran are lifted. Aban Offshore is a Chennai-based offshore oil exploration and production firm.

However, not all analysts are convinced about the opportunities from the US-Iran deal. “It does not make sense for investors to rejoice from the news because increase in supplies would mean lower oil prices. That is not going to help the company do well when it is already battling a huge debt of Rs 15,000-16,000 crore,” said a head of research of an Indian brokerage firm.

Analysts said that there were also rumours in the market that the company was looking to reduce the quantum of its debt by re-negotiating the terms of the interest rate on its debt.

The stock price of the company on Tuesday morning was trading at Rs 381.50, up 5.9% from its previous close. Market participants said that most of the movement in the stock seen in the last two days was largely-driven by speculator and trader activity and that very few investors were seen taking an interest.

The NSE Nifty on Tuesday was down 0.39% to 6,091 while the BSE Sensex declined 0.38% to 20,526.