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Top Cassettes: Happy tunes

Raghuvir Srinivasan

IN a market that is seemingly concentrating only on the

stocks from the technology and communication sectors, select ones from other industries have been quite active. It has essentially been a reaction to specific developments concerning the respective companies. Three such stocks that have been active in th e last fortnight are Top Cassettes, IP Rings and Bajaj Auto.

Top plans: Top Cassettes, a relatively unknown company till now, seems to be suddenly in the news. It has unveiled ambitious growth plans that would see it simultaneously diversifying into related businesses within the country and setting up offices abro ad for exploiting opportunities in the export markets.

The company plans to open a new division in Ahmedabad for the production of books, audio cassettes, CDs, VCDs and CD-Roms. It would also be producing gift articles and entering the greeting cards business, which has become attractive following the succes s of others such as Archies Greetings.

Top Cassettes is also planing to invest $50 millions in two companies in the US and Mauritius. The US operations will be taken care of by a proposed new company called Top Multi Media Inc, which would set up a network of 300 prominent libraries. The whol ly-owned subsidiary planned for Mauritius would help the company get quota-free access to world markets apart from helping it exploit the tax-free regime there. The company is seeking permission of the Reserve Bank to capitalise its export proceeds as in vestment in the two ventures.

The Top Cassettes stock has been moving up in the last fortnight gaining about 30 per cent in value. The stock was being traded at around Rs. 13 barely two weeks ago.

Protective ring: The last fortnight has seen a re-rating of the IP Rings stock as it gained about 16 per cent in this period. The upward valuation seems to be largely driven by the news of Nippon Piston Ring Co, IP Rings' Japanese collaborator, increasin g its stake in the company from 4.99 per cent to 9.99 per cent. The Japanese company received permission last week from the Ministry of Industry to purchase up to 3,52,107 shares from the secondary market for the purpose.

It is quite evident that this is the news driving the stock currently as fundamental factors do not warrant a re-rating of the stock. The company has just announced its first quarter fiscal 2000-01 results which show a marginal 3 per cent growth in net e arnings at Rs. 42.03 lakhs on a turnover of Rs. 7.70 crores, which is 21 per cent higher compared to the same period last year. The company is not only up against some stiff competition in the market but is also facing a situation of reduced offtake from vehicle manufacturers.

Buyback fails to enthuse: Bajaj Auto, which announced a buyback of its shares last week, has witnessed flat trends in the stock price. Though the buyback price of Rs. 400 is at a premium to the ruling market price, the market does not seem to be enthused either by the price or by the quantum of buyback. The company had announced a buyback of 1.8 million shares representing 15.08 per cent of the paid-up equity capital of the company.