MC Inside Edge : Metropolis bulls feast on options, bourses turn wary of SME IPOs, bearish bets mount in Voda, Ramco Systems takes off

MC Inside Edge

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MC Inside Edge : Know what stocks veteran bulls are eyeing, what the bears are ganging up against, major deals and all the inner goings-on from Dalal Street

Cross connection

Bearish bets on Vodafone Idea are on the rise. Open positions in the securities lending and borrowing (SLB) segment—an  indicator of shares borrowed to short sell—have more than doubled to 6.3 million shares. There is chatter about a prominent US-based fund looking to participate in the company’s fund-raising effort. That, in turn, has sparked chatter that this US-based fund could be a proxy buyer for a leading corporate group to which it had played White Knight not long back. Hedge funds associated with this corporate were said to have been big buyers in the Vodafone stock last year. MC Inside Edge

Life in a metro

Frenzied buying ensued in Metropolis Healthcare shares after a strong fourth quarter update announced Thursday evening. But the bigger news for the bulls is that the company has become debt-free. The company has said that competitive pressures are easing, but that has been the case for a while now. Massive buying was seen in call options on Friday, especially in the 1900 and 2000 strikes, and that too on a day when the market tanked. That could mean one of the two things—either some development is in the offing that only a few know about, or there’s a deliberate effort to push the stock into the F&O ban list. Getting the

stock into the ban list is a good way to squeeze the bears. Mutual funds have warmed up to the stock of late, even as foreign funds have been steadily trimming stake. Quarterly revenues are climbing back to peak-COVID levels, though margins are unlikely to go as high anytime soon. MC Inside Edge

Calculation error

Stung by SEBI’s comments on the froth in small and micro (SME) IPOs, stock exchanges appear to be going slow in granting approvals. That is causing heartburn both to the promoters of these companies as well as HNIs who have invested in pre-IPO rounds. Till a couple of months back, there was visibility on the time by when a company’s shares would be getting listed. Many of these companies took up orders betting that funds raised from the IPO would meet working capital requirements, besides capacity expansion

plans. Now the companies are going back to the same HNIs asking for short term funds. And the HNIs are opting to double down on their bets as not doing that could worsen matters for the company as well as their own investments. MC Inside Edge

Like a rocket

Bulls are buying shares of loss-making Ramco Systems hand over fist. An order from Korean Air announced last week is what is driving the frenzy. Question is whether the ‘multi million dollar’ order is good enough to turn around the fortunes of the company, which has been making losses at the operating level for the last nine quarters in a row. Informed circles appear to have accumulated the stock earlier this year, as can be seen from the spike in trading volumes in a few sessions in January and February this year. MC Inside Edge

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