Ranbaxy rebounds 15%; Sebi asks for data on price movement.
The Ranbaxy stock rebounded 15 per cent on the Bombay Stock Exchange on Wednesday after the companys promoter and CEO Malvinder Singh said that vested interests have been trying to pull down the stock and the market price does not reflect the true potential of the company.
Speaking at a teleconference with analysts just before the markets opened, Singh said, "I understand that there are rumours in the market that a big pharmaceutical MNC, a leading Indian company and some stock brokers are trying to put pressure on the stock price and take advantage of the situation."
Meanwhile, the Securities and Exchange Board of India has asked for detailed data on the Ranbaxy stock price movement. Singh said the company will provide the information in the next few days.
Business Standard had written yesterday that a cartel led by top stock market operators has been trying to corner the shares of the company at a lower price and would tender them in the open offer at a higher price.
Sources familiar with the situation said the operators having insider knowledge about the company had cornered nearly 50 million shares at Rs 405-450.
The Ranbaxy stock had fallen 25 per cent in two trading sessions this week. Open interest positions of over 20 million were built in the counter in the futures and option segment on Tuesday, indicating creation of long positions at lower share price by operators.
Nearly 40 shares out of every 100 shares are likely to be accepted in the open offer by Daiichi Sankyo at Rs 737. This also brings down the cost of rest of the shares held by operators to as low as Rs 200, which could against be sold in the markets earning them a 100 per cent return.
The sources said a leading company has already earned a good return through safe arbitrage trade in the counter. The Ranbaxy share was beaten down from as high as Rs 564 to Rs 405 in the past one month. This provided for an attractive arbitrage play.
The price had fallen following persistent rumours that Daiichi would pull out of the deal or lower its offer price as the Food and Drug Administration (FDA) in the US was investigating Ranbaxy on serious forgery and drug adulteration charges.
Putting all such rumours to rest, Singh said:"The Daiichi-Ranbaxy deal is a binding one and is absolutely on track. We had an emergency general meeting on July 14 this month where the share holders unanimously approved the infusion of additional equity and warrants to the extent of $1.2 billion, coming into the company from Daiichi Sankyo."
