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Grow Mudra's Inside Edge: Data centres are the new oil, order won or in-the-pipeline, fund managers cautious on QIPs, Emperor’s favourite

11 Jun , 2024   By : Debdeep Gupta


Grow Mudra's Inside Edge: Data centres are the new oil, order won or in-the-pipeline, fund managers cautious on QIPs, Emperor’s favourite

Castrol shares are slowly recovering after last Tuesday’s drubbing. The stock is seeing interest from some HNIs and PMS funds. Their bullishness stems not so much from a positive outlook on the auto sector, as much as on growing demand for data centers in the country. Data centers are energy guzzlers and need coolants, which are right up Castrol’s alley. The stock swiftly rallied from around Rs 140 levels in December to a 7-year high of Rs 230 by April but has since been struggling. One reason could be that domestic mutual funds and FIIs are yet to warm up to the story. Also, the HS Busy mutual fund dumping around 2.6 million shares in May added to pressure on the stock. That the stock remained in a narrow range amid the selling suggests accumulation by strong hands.

At a time when some MNCs are trimming stakes in their Indian arms, the foreign parent holding just 51 percent in Castrol is a major source of comfort to bulls as it lowers the possibility of a promoter stake sale.

Bird in hand…or in the bush

Shares of Wardwizard Innovations & Mobility are on a tear. A few days ago, the company informed the stock exchanges that it had bagged a $1.29 billion order from Philippines-based Beulah International Development Corporation. There is some confusion over the wording of the release, and it is not clear if the order has already been given, or if it is just a memorandum of understanding that has been signed. Meanwhile, insider trading disclosures of the firm show that promoter group entities had sold 1.5 million shares in the last three trading sessions of May.

Hold your horses

Companies are in a hurry to raise money through qualified institutional placements now that a stable government is in place. Bankers are busy-sounding prospective investors, but institutional investors are learning to be adopting a wait-and-see approach. Share prices may have rallied, but the near-term outlook on the market remains a bit iffy. Many fund managers are coming around to the view that rather than buying at elevated valuations, it makes sense to wait for a more attractive entry point.

The missing link

Shares of pen maker Linc are struggling to regain highs made in March this year. The story is not finding too many takers at higher levels because earnings growth has been nothing to write home about. The lone cheerleader for the stock right now is the Emperor brokerage which has been trying to hard sell the idea to prospective investors.

Coincidence

Ramesh Abhishek, former chief of the Forward Markets Commission, has stepped down as the non-executive, independent director of Nuvama Wealth Management. While the former bureaucrat has cited “personal commitments” as the reasons for resigning, the industry is abuzz with talks that the move could have to do with the ED raids last month. The raids by the investigative agency came on the back of a CBI FIR, which accused Ramesh of pocketing hefty consultation fees from private companies he once oversaw.

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