Reliance MF launches Fixed Horizon Fund-XX-Series 31

Reliance MF new issue closes on 13th September

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XX-Series 31, a close-ended income scheme.

The investment objective of the scheme is to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities maturing on or before the date of maturity of the scheme with the objective of limiting interest rate volatility. The tenure of the scheme is 677 days.

The new issue closes on 13th September. The minimum investment amount is Rs5,000.

Crisil Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.


DSP BlackRock MF floats 3 months fixed maturity plan

DSP BlackRock MF new issue closes on 7th September

DSP BlackRock Mutual Fund has launched DSP BlackRock FMP-Series 9-3M, a close-ended income scheme.

The investment objective of the scheme is to generate returns and capital appreciation by investing in a portfolio of debt and money market securities. The tenure of the scheme is three months.

The new issue closes on 7th September. The minimum investment amount is Rs5,000.

CRISIL Liquid Fund Index is the benchmark index. Dhawal Dalal is the fund manager.


Shakti Pumps openly shows eagerness to boost share price

The company, in its official filing with the Bombay Stock Exchange, writes about the promoters’ “creeping acquisition” of its own shares and how its share price has beaten the Sensex

There are a number of companies in the stock market that can go to any extent to increase their share price. But nobody will say this openly.

Now, strangely, there is one company that is doing exactly this. Indore-based Shakti Pumps (India) Ltd has openly advertised its true desires, and that too in a filing to the Bombay Stock Exchange (BSE).

An interesting aspect is that the filing appears more like a news item than a statement by the company. While the company makes a noise about its shares beating the Sensex in the past four weeks, it fails to mention that during this period its shares have in fact fallen to a 52-week low.

On 2nd September, Shakti Pumps filed a statement with the BSE saying, "Please find enclosed herewith the scanned copy of Press Release for Recommended Dividend and started creeping acquisition". A company announcing its 'creeping' acquisition? In addition, the word creeping is usually used to negatively to denote stealing or sneaking into. So, why on earth would Shakti Pumps want to steal its own shares? More about that later.

Let's take a look at the company's share price. According to a statement by Shakti Pumps, the shares of the only five-star Bureau of Energy Efficiency-certified pump manufacturer opened this week (22nd August to 26th August) at Rs38.50 and closed at Rs49.05 because of the creeping acquisition of shares by promoters.

One would like to know why the promoters of Shakti Pumps are increasing their stake in the company. The statement answers this also. It says, "On contacting a company person aware of developments, BP Patidar (who is Director-Finance, Shakti Pumps) said the promoters are wishing to increase their stake by 3%. He further added, the company has started booster pump manufacturing unit of annual capacity of 40,000 pumps will be operational by 31st December 2011, are few factors making promoters to acquire shares through creeping route".

According to the statement, the promoters bought 35,670 shares of Shakti Pumps from the open market between 24th August and 27th August, at an average price of Rs50.08. Owing to the promoters' buyback during the week ended 26th August, Shakti Pumps shares rose by 27.50%, whereas the benchmark BSE Sensex declined 2% to 15,848.80 points. The statement also claimed that during the week to 26th August, its share price outperformed the Sensex for the fourth week.

As of June 2011, promoters hold a 46.92% stake in Shakti Pumps, while the rest 53.08% is held by the public, including corporate bodies. In the past 52 weeks, Shakti Pumps hit a high of Rs115.50 on 7th September 2010 and a low of Rs37 on 19th August 2011.

Normally, promoters of many companies opt for the buyback route to boost, ratify sentiment of market participants towards their company, especially when the share price has been falling. This may be one of the reasons, why promoters of Shakti Pumps are more inclined to buy back the company's shares. However, till date not a single listed company has used a 'news item' format for a regulatory filing that describes a share buyback and compares its performance with the benchmark.


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