Shares of logistics services provider Gati Ltd hit the upper circuit of 20 per cent (19.87 per cent) to close the day's trade at Rs 38.30 following some news flow of a leading fund partially diluting its holding through market sale.
Hectic trading
According to statements made to the stock exchanges, there has been hectic trade in the scrip over the last few days with some institutional buyers increasing their holding and others exiting as the country's logistics business is on a consolidation mode.
The Indian Infrastructure Fund, LLC operating out of Mauritius, in its filings on Tuesday has informed that it has brought down its stake in the company by about 1.98 per cent through open market sales, to take it to 5.93 per cent. When contacted, the Chief Financial Officer of Gati, Mr Sanjeev Jain, told
Good prospects
“This development only shows that the business we are in has good prospects going ahead and also reflects the confidence such an investor has in the company.
“The company is doing well and growing quarter over quarter and we see the market for express delivery getting better and bigger,” he said.
Asked to comment about some suitors coming in for stake buy-out, Mr Jain said, “it is difficult to comment on market speculation. In fact, we believe that the market reaction is due to correction in share price after they saw the success of FCCB issue.”
Mr Rajesh Ravi of Karvy said the market for logistics business is under-penetrated and there are immense opportunities for growth in the sector. However, as there is consolidation in most sectors, there could be similar developments in logistics and express delivery business.