Street signs: HEG dream run ends, Vodafone Idea stock in demand, and more

Vodafone Idea, Jet in demand on SLB

Shares of Vodafone Idea and Jet Airways are in demand on the stock lending and borrowing (SLB) mechanism. Borrowers are willing to pay to get these shares in their hands to avail shorting opportunities. Last week, the Idea and the Jet counters fetched annualised yield of 21 per cent and 96 per cent, respectively. Market experts said traders expect weakness in these two counters going ahead. “Shares of Vodafone Idea will come under pressure once the new equity shares issued through rights will enter the market. Jet shares also will be volatile given the business uncertainty. Traders believe there is a lot of money to be made by going short in these two stocks and that’s reflecting in the SLB activity,” said a broker.

HEG dream run ends

Shares of HEG crashed 44 per cent during the March quarter amid exodus by large shareholders. Interestingly, this was the first quarterly decline for the stock in nine quarters. Shares of HEG had skyrocketed an unprecedented 24 times from Rs 150 to Rs 3,707. According to March quarter shareholding data, around two dozen large investors (those holding at least 10,000 shares of HEG) cut their exposure to the stock between January and March. The company also conducted Rs 750-crore share buyback in March, where it repurchased around 1.36 million shares at Rs 5,500 each. 

High acceptance, low gains

Retail shareholders of Wipro have to make a difficult choice — to tender shares in a buyback or continue holding the stock given the strong momentum. Shares of Wipro are currently quoting at Rs 295, up 16 per cent this month. The buyback price is set at Rs 325 apiece, 10 per cent premium to the current market rate. Around Rs 1,575 crore worth of shares are reserved for small shareholders in the Rs 10,500-crore buyback. Some brokers say the acceptance ratio in the Wipro buyback for retail investors could be more than 50 per cent going by the analysis of the shareholding data. “In the past, those investors that didn’t tender their shares in Infosys and TCS buyback were rewarded. Investors are facing a similar dilemma in case of Wipro,” said an analyst.