Rakesh Jhunjhunwala sells Large Stake in Orchid Chemicals

March 4, 2011   ·   0 Comments

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According to the bulk deal data on the National Stock Exchange, Jhunjhunwala has sold 600,000 shares in the company at Rs 274.55 a share on Thursday. Meanwhile, Merrill Lynch Capital Market had sold 5.62 lakh shares for about Rs 14.9 crore, but the buyers of the stake was not known.

As per the shareholding pattern available on the stock exchanges, as of December 31, the Big bull owned 3.54 per cent stake in Orchid.

In October 2010, Jhunjhunwala had picked up a 0.87 per cent stake in the company for Rs 15.18 crore in an open market transaction.The Price he got the STAKE was 246.50 Rs.. Later, he increased his stake to 3.54 per cent.

“Orchid Chemicals will do well. It has made large investments; those investments will now come to fruition. A large part of the investments have been made in areas where others cannot enter in. So there is some kind of a surety to the future prospects. The second is that they de-leveraged substantially by selling to Hospira and they have a good deal with hospitals where they can supply the APIs. So it is an area where people cannot enter easily. It has made large investments and it will bear fruit. As usual you have to be a patient investor,” Jhunjhunwala, touted as India’s Warren Buffett, was quoted as saying by media reports after he picked up the stake.

The promoters of Orchid, which was under constant pressure from corporate raiders, have increased their stake to 30.53 per cent from 22 per cent in December 2009, via the creeping acquisition route.

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