Even as investors were pummelling the Crompton Greaves Ltd stock on Thursday, when the stock shed for the second consecutive day more than 10 per cent of its value, it found an unlikely Knight in a mutual fund house that bought nearly 65 lakh shares valued about Rs 120 crore on a single day, raising questions as to from where the supply that is delivery-based would have come.
While the ordinary investors may have resorted to panic selling in the counter following poor results and on the back of report of selling by a former senior executive of the company, the fund house may have sensed an opportunity to bite into the counter deeper, in view of the long term growth prospects for the company and for the power utilities/ infrastructure sector itself.
Interestingly, nearly 77 per cent of the entire purchase — 50 lakh shares — was made on behalf of a single scheme — HDFC Top 200 — which is a large cap fund, reflecting the cash position the scheme may have held.
Bought for 3 schemes
In a communication to the stock exchanges on Friday, Crompton Greaves Ltd said that on July 21, the second day of the mayhem the counter witnessed in the stock exchanges, HDFC MF lapped up a staggering 6.4 million shares in the counter on behalf of three schemes managed by it.
The single day's buying amounted to 1.01 per cent of the paid up capital of the company which is not small considering that Crompton Greaves' equity capital is substantial at Rs 128.29 crore.
The mutual fund's declaration shows that even before yesterday's acquisition, HDFC MF held substantial number of Crompton Greaves' shares (face value of Rs 2) — 30,501,029 shares constituting 4.76 per cent of the equity of the company under 17 different schemes.
On Thursday, the fund picked up 64,98,759 shares amounting to 1.01 per cent of the equity, taking its total holding in the counter to 3.69 crore or 5.77 per cent of the equity capital.
Details of purchase
The stock exchange filings show that on Thursday, the acquisition was made on behalf of HDFC Equity Fund (10,00,000 shares for a value of Rs 18.12 crore), HDFC Prudence Fund ( 4,98,759 shares valued about Rs 9 crore), and HDFC Top 200 Fund ( 50,00,000 shares worth Rs 92 crore).
Thursday's purchase does not seem like a block deal because the shares were bought from different exchanges and the orders were executed through different trading members.
While the orders for 10 lakh shares bought on behalf of HDFC Equity Fund (from NSE) and the 4.98 lakh shares for HDFC Prudence (from NSE and BSE) were routed through Standard Chartered-STCI Capital Markets Ltd, the purchase on behalf of HDFC Top 200 Fund was done through SPA Securities Ltd and J.P. Morgan India Pvt Ltd from both NSE and BSE.
The spread of the order also could have contributed to the counter not overheating, though the average purchase price appears to be in Rs 178-181 price band.