Castro fund charmed by Jain Irrigation

STREET SIGNS

Castro fund is spreading its net far and wide, which explains their buying of Jain Irrigation stock at Rs 172.45. The number of shares involved amounted to more than four lakhs.

Apparently Castro fund's interest in the stock has stemmed from the fact that the company board had recently approved the merger of Terra Agro Technologies Ltd, an unlisted Indian company engaged in the business of cultivation and dehydration of vegetables for exports. Jain Irrigation intends to use the Terra Agro base in South India to produce and promote its agriculture products like drip, sprinkler, PVC pipes, TC banana, etc. There are enough domestic analysts who are excited by the potential of the stock.

According to one, the opportunity in the agriculture sector is ripe for conversion and Jain Irrigation's business model is suitably placed to capitalize on that opportunity.

Silky smooth

Now our Merry Lunch is venturing into hitherto unchartered territories. The fund bought some shares of ESI (Eastern Silk Industries) Ltd. at Rs 2860 levels.

In fact the stock has been on surge in the recent past with many domestic funds reported to be buying into the counter, with the result that the stock has appreciated by more than 60 per cent in the past three months.

Apparently, what has led to this buying interest is the fact that the Kolkata based company, one of the leading exporters of silk in the country, is planning to raise Rs 70 crore through foreign currency convertible bonds (FCCB) and private placement of equity for future expansion.

ESI registered a 100 per cent jump in net profit in the first quarter of the current fiscal from Rs 3.95 crore to Rs 8.35 crore. Reports also say that the promoter group is also planning to merge some group companies like Eastern Jingying and Sstella Silks Ltd with ESIL. What is more, the company would be expanding its fabric capacity from 6 lakh metre per year to 12 lakh metres per year in two phases at its plant in Karnataka. With such a spate of positive news flow emanating from the counter, is it wonder that Merry Lunch was interested?

More of the same

Following its recent buying at the Gujarat NRE Coke counter, the German Fund has decided to acquire some further shares. The fund is said to have bought some 4.8 lakh shares at Rs 152 levels, following its recent purchase at Rs 147 levels.

Clearly the fund liked what it saw. Recently Gujarat NRE Coke acquired a five per cent stake in Australian coal producer, Resource Pacific Holdings Ltd for A$8.1 million (approximately Rs 27 crore. This acquisition would give the company access to a minimum of five million tonne of coal for the next 10 years, which should go a long way in curbing raw material costs, which have been rising sharply of late.

In other news...

One Emerging Market fund has bought Centurion Bank at Rs 20 levels. The debt fund manager who recently launched its premium class equity fund has bought 90,000 shares of Crew.B.OS Products at Rs 199 levels.

Never mind the fact that the stock price has doubled in the past three months.