The shares of Emami Ltd’s newly spun-off realty arm have tanked massively on listing day, raising doubts about price manipulation amid lack of transparency.
Emami Infrastructure Ltd, the demerged realty arm of FMCG major Emami Ltd started trading on the national bourses on Wednesday and has already kicked up quite a storm in early trading hours.
The shares opened as high as Rs598.80 on the National Stock Exchange (NSE), only to come crashing down to Rs86.00 at the hour mark, translating into an astounding drop of 86%. The total traded volume stood at around 8.9 million shares on the NSE.
Meanwhile, on the Bombay Stock Exchange (BSE), Emami Infra opened at Rs250, hitting a high of Rs293 and then slipping to a low of Rs86. The total traded volume on the BSE stood at around 5.8 million shares. Finally, Emami Infra shares clsoed Wednesday at Rs101.7 on the BSE and at Rs103.7 on the NSE.
The wild fluctuations in the share price of Emami Infra and the gaping hole between the opening high price and day's low, within such a short span of time, raises a lot of suspicion. Certainly, a lot of manipulation is being carried out around this stock and begs some sort of regulatory intervention. The lack of transparency surrounding the company's listing and operations also raises a stink.
Most brokers were unaware of the situation and could not justify the wide price differential between the opening price at the two bourses or the wild gyrations in subsequent trading. Alok Churiwala, managing director, Churiwala Securities suggested that the only plausible explanation could be the time lag between the two stock exchanges. "NSE has a system of trading on co-located servers. It means that certain brokerages have their servers in the same facility as the NSE server. This enables them to trade within milliseconds, wherein hundreds and thousands of trades can take place. If one computer can do hundreds of trades in this time, imagine 10-15 computers doing it at the same time. By the time these prices reach the rest of the market, there could be a time lag. Possibly, by the time BSE could react to the prices, the ups and down would have already occurred at the NSE."
Commenting on the chances of price manipulation, Mr Churiwala said, "One can't infer that directly, but there could be some element of price manipulation. A movement like this is what gives rise to suspicion in minds of investors and is a fit vase for investigation."
Emami Infra is the outcome of a recent restructuring exercise by the parent company, Emami Ltd, wherein the group decided to bring its FMCG business under Emami Ltd and spin-off its realty business under a separate company.
Emami Realty, the erstwhile unlisted realty subsidiary of Emami, is now Emami Infrastructure. Zandu Pharmaceutical Works, which was renamed Zandu Realty following the restructuring, is now a listed real estate company and a subsidiary of Emami Infra.
The listing was done following shareholders' approval where one Emami Infrastructure share will be issued for every three Emami shares, while 14 Emami shares of Rs2 each will be issued for every one Zandu share of Rs100 apiece.
Reliance HealthWise has jacked up premiums by 500%. It’s time to act and send your complaints to IRDA.
We had reported earlier on the astronomical rise in Reliance HealthWise premiums. (See: http://www.moneylife.in/article/8/7498.html). Moneylife has received a number of reader responses on this article.
Subsequently, we contacted a senior official at the Insurance Regulatory and Development Authority (IRDA). He was not aware of the incredible Reliance HealthWise premium increase (by 500%). The IRDA official has forwarded all the information to the Consumer Affairs Department and has promised to get back to us in a couple of days. According to industry sources, any increase in premium has to be supported by actuary data needed by IRDA for justifying approval. When we checked with the IRDA official about the same, Moneylife was told that the loading has to be specified by the insurance company in the product document that gets approved by IRDA. The official was going to check the Reliance HealthWise product document. We are requesting him to send us a copy of the same.
Policyholders can approach the IRDA grievance cell:
http://www.irdaindia.org/grievance/contactinfo.htm. They don’t entertain third-party personnel to register complaints, and hence we are not in a position to forward any complaint. The toll-free number for the IRDA grievance call centre is 155255. Email to both [email protected] and [email protected]. The newspaper advertisement has the first email address while the webpage has the second email address. You can send a scanned copy of your Reliance HealthWise policy renewal showing old premium and new offered premium. If there is no claim made till date, please specify the same in your complaint.
IRDA is carrying quarter-page advertisements in DNA and Economic Times urging policyholders to contact them with any problem with respect to insurance companies.
Reliance policyholders will have to register complaints with IRDA before they can expect any regulatory action against Reliance General Insurance. A Right to Information (RTI) query by a policyholder may help to know if Reliance General Insurance indeed has IRDA approval for 500% jump in premiums.
Please register your complaint in writing with Reliance General Insurance too. Moneylife will certainly keep you updated and request you to keep us updated if you hear anything from Reliance General Insurance or IRDA.
Purchasing from power exchanges has become more popular with States like Punjab and Uttar Pradesh purchasing huge volumes through this mode
Over the past one year, more and more States have been coming on the exchange to purchase power. According to Central Electricity Regulatory Commission (CERC)'s latest market monitoring report, four new States and one new Union Territory have come on the trading platforms post May 2009.
There were 18 States purchasing power on the power exchanges for May 2010 against the 11 States in May 2009. Punjab, Uttar Pradesh, Arunachal Pradesh, Meghalaya and Union Territory Daman & Diu are the new regional players.
Out of these four States, Punjab and Uttar Pradesh have purchased significant volumes in May 2010. For May 2010, Punjab has purchased 29.84 million units (MUs) through power exchanges, which is around 4.45% of the total power purchased by all States through this mode. Uttar Pradesh has purchased 8.60% of the total volume or 57.64 million units in the same period.
According to sources, individual sources and independent units have contributed majorly to Punjab' high purchase volumes, whereas Uttar Pradesh's total purchase is through State electricity utilities. Arunachal Pradesh's purchase volumes are a mix of purchase by the State electricity utility and individual industries.
In May 2009, the total volume of electricity purchased by all States put together was 341.70 MUs. In May 2010, the total volume purchased by the States stood at 670.39 MUs, with around 18 purchasing States.
In May 2009, Rajasthan (34.83%), Haryana (26.25%), Maharashtra (16.78%), Tamil Nadu (12.51%) and Andhra Pradesh (4.18%) were the top five States purchasing power from the exchange. According to the latest (May 2010) data, Uttar Pradesh is a new addition to these top five States, with Andhra Pradesh dropping to the 8th position.
This increase in the number of new States purchasing power from the exchange is also reflected in the total percentage of volumes purchased by the top five States. In May 2010, the top five States purchased around 80.24% of the total purchase volume of all States, 14% less than 94.55% in May 2009.