Psidc Offloads Punjab Tractors Shares Chunk

Trading in the Punjab Tractors scrip has been strong at the major bourses in recent days, with reports of a large chunk of shares being sold by the majority shareholder, the Punjab State Industrial Development Corporation (PSIDC).

The scrip yesterday witnessed a trade of 10,000 shares on the Bombay Stock Exchange (BSE) at the Rs 685 levels while on the National Stock Exchange (NSE) it was traded at Rs 682 with 1,350 shares changing hands.

PSIDC has a nearly 26 per cent stake in the company, while domestic financial institutions hold around 24 per cent. The present equity of the company stands at Rs 20 crore.

While the exact number of shares sold by PSIDC in recent days is yet to be ascertained, a section of the broking community said, overall nearly seven lakh shares could be offloaded in tranches in the coming weeks.

According to market circles, one of the main reasons for PSIDC selling its stake could be on account of a possible cash crunch. The shares had been purchased from the company at considerably lower prices, sources said. Punjab Tractors, a largely illiquid B1 group stock, has witnessed occasional huge trading volumes at the BSE over the past six weeks. Brokers at the BSE cite this occasional large trading volumes to negotiated deals taking place with either a domestic financial institution or foreign institutional investor (FIIs).

Punjab Tractors, has not shown much price fluctuation in last two months. On December 15, the scrip was traded at Rs 665 at the BSE witnessing trades of 10,552 shares. According to an analyst with a leading BSE brokerage, Punjab Tractors is among the few corporates whose performance in recent times has been strong.

It has been able to notch up sales of Rs 360 crore for the first half of 1997-98 with net profit touching Rs 41.20 crore thus giving an EPS of 20.04. The company last year sold 18,938 tractors.