Date:20/07/2004 URL: http://www.thehindubusinessline.com/2004/07/20/stories/2004072002501500.htm

Back Aggressive buying lifts MRPL

Jayanta Mallick

Kolkata , July 19

THE MRPL stock is attracting attention of a section of investors and day traders. Aggressive activity by these players during the last two trading sessions has seen the counter move up 22 per cent with hefty volumes.

On Monday, the stock went up by 2.2 per cent to close at Rs 45.85. The stock clocked a trading volume of 34.76 lakh shares on the BSE and 90.43 lakh shares on the NSE. Just around 20.5 per cent of the total traded quantity represented the delivery volumes. This suggested hectic market making activity and surge in liquidity.

Traders and dealers said that an expectation of higher valuation through a possible stake buying deal by ONGC with HPCL was driving the stock. HPCL holds 16.97 per cent stake in MRPL. ONGC has 51 per cent holding. ICICI Bank, IDBI, SBI, BoB, BoI and Canara Bank hold around 15.45 per stake of MRPL.

At today's closing price, the stock traded at 17.5 times its 2003-04 earnings per share.

Mr Rajesh Aggarwal of CD Equisearch felt that in case of valuation to buy the stake, each share should fetch at least Rs 70 to Rs 80 based on improved fundamentals. "The financial restructuring has seen the company out of woods. It is also drawing up plans for retail oil marketing, which should boost growth in the near future," he added

According to Mr Ketan Thacker, the recent announcements by the CMD of ONGC, Mr Subir Raha regarding MRPL has also bolstered sentiment for the stock.

MRPL is currently operating its refinery at 120 per cent capacity utilisation. An investment of Rs 500 crore on de-bottlenecking and quality improvement is also on the anvil. "Mr Raha announced these on July 14 and since then the stock is moving up," Mr Thacker noted.