Citizens' Issues
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.

User

JPC probing into the 2G scam gets time till the budget session

Term of the Committee was to expire during monsoon session that concludes on Thursday

New Delhi: Unable to complete its task within the allocated period, the Joint Parliamentary Committee (JPC) looking into the 2G spectrum scam was today granted an extension till the budget session next year.

The term of the Committee, headed by PC Chacko, was to expire during the monsoon session that concludes on Thursday, reports PTI.

Mr Chacko moved a motion in the Lok Sabha today seeking an extension for the presentation of the report of the Committee till the last day of the next budget session. The motion was adopted by a voice vote.

The 30-member committee has so far heard officials of the Enforcement Directorate, the Central Bureau of Investigation and some former telecom secretaries. It is yet to hear other former telecom secretaries, former chairmen of the Telecom Regulatory Authority of India, former attorney general Soli Sorabjee and former telecom ministers.

The JPC, consisting of 20 members from the Lok Sabha and 10 from the Rajya Sabha, was constituted on 4th March to examine matters relating to allocation and pricing of telecom licences and spectrum between 1998 and 2009.

The government had agreed to constitute the JPC after persistent demands by the opposition which had led to that washout of the winter session.

User

News Corp. to Sell Wapping Site

News International says decision to sell 15-acre site follows a review of its London property portfolio

Read Article

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)