Torrent Pharma up on sellout rumour, bonus fires Ashtavinayak.

The Sensex has lost nearly 10% or 1725 points since January 19, and the BSE 500 9.4% or 661 points.

The market capitalisation of India’s top 500 companies fell by Rs 562,628 crore in the period. But the moot point is, only 90% of the stocks on that list have shed value.

There were 45 that weathered the storm and rose strongly, hinting there’s more than meets the eye — at least in some cases.
Of these, shree Ashtavinayak has gained the most, rising 34.71% after a 4:1 bonus announcement. The company also plans to invest Rs 500 crore for expansions that include entry into overseas distribution.

Jai Corp, owned by Mukesh Ambani aide Anand Jain and once the darling of the markets because of its special economic zone plans, has also bucked the trend by rising 16.5% in the period.

Torrent Pharma has been like the Rock of Gibraltar for some time now. It has popped 14.86% in the last three weeks on scuttlebutt that the Mehtas, the promoters of the company, are selling out to focus on their power business (as reported by DNA Money on December 4, 2009).    

The $15 billion Japanese pharma firm Takeda, along with some European multinationals are said to be prospective buyers. Torrent officials continue to deny any sale plan, but it’s certainly a rumour that refuses to die.

The reasons touted for Takeda eyeing generics are many. For example, the company is staring at patent expiry on its blockbuster diabetes drug Actos (pioglitazone, which grossed sales of approximately $4.2 billion in 2008) in early 2011, and is thus looking at international expansion, especially into generics, as a way to bolster sales.

Among others, Indraprastha Gas, Titan Industries, Nirlon and HFCL have all registered double-digit gains.

Vijay Kedia, managing director of Kedia Securities, sees opportunity for investors in stocks that have fallen, if they have a long-term horizon.

“A big rise in the markets is unlikely in the near future, but the ongoing correction has provided retail investors with a nice opportunity to invest in some quality midcaps,” he said.

With inputs from Sachin P Mampatta & Nitin P Shrivastava