Street signs: Arbitrage opportunity in Escorts, IRCTC stock jumps & more

Arbitrage opportunity in Escorts

Japanese firm Kubota will soon launch an open offer in tractor manufacturer Escorts to acquire 26 per cent stake at Rs2,000 per share. Shares of Escorts were up 10.6 per cent and closed at Rs1,803 on Thursday but are still nearly 10 per cent below the open offer price. Analysts believe there is a good opportunity for retail investors in the counter as they believe there is high probability of their shares getting accepted in the open offer. “The minimum acceptance ratio is 51 per cent and the final acceptance could be 70-75 per cent. Thus with favourable risk to reward, one can look to participate at current market price,” says a note by Edelweiss Alternate Research.

Zomato, Lodha added to FTSE indices 

Zomato, Macrotech Developers (Lodha), and Sona BLW have been added to the FTSE All World and FTSE All Cap indices. The change will become effective from December 17. The move will led to passive inflows of $66 million in Zomato, $22 million in Lodha, and $24 million in Sona, accordint to IIFL Alternative Research. Clean Science Tech, which has been added to the All Cap index, will see passive buying worth $9 million.

IRCTC’s retail investor count jumps

The retail investors count in Indian Railway Catering and Tourism Corporation (IRCTC)  jumped more than 50 per cent to nearly 870,000 during the quarter ended September 2021. The sharp 85 per cent jump in the stock coupled with stock split proposal has enthused small investors towards the counter, said experts.

In percentage terms, retail shareholding increased from 11.26 per cent at the end of the June 2021 quarter to 14.17 per cent. The company proposed a 1:5 split in August and it became effective end-October. The fall in denomination will led to further increase in retail investor count during the December quarter, feel experts.