Rakesh Jhunjhunwala buys stake in SAIL; PSU steel stock jumps 2%

Rakesh Jhunjhunwala buys stake in SAIL; PSU steel stock jumps 2%

Billionaire investor Rakesh Jhunjhunwala has purchased an additional stake in Steel Authority of India (SAIL) during the April-June quarter.

Billionaire investor Rakesh Jhunjhunwala has purchased an additional stake in Steel Authority of India (SAIL) during the April-June quarter, data available with the stock exchange shows. According to the latest shareholding pattern available on the BSE website, Rakesh Jhunjhunwala now holds 5,75,00,000 equity shares of SAIL or a 1.39% stake. SAIL stock price has been rallying since the end of March 2020 and the recent rally has been helped by soaring commodity prices among other factors. SAIL share price was up 2.3% on Thursday, trading at Rs 127.4 per share.

Although this is the first time Rakesh Jhunjhunwala’s name has appeared as SAIL’s shareholder on the stock exchange website, documents available on the company website show the big bull held a stake in the company at the end of the previous quarter. Rakesh Jhunjhunwala along with his wife owned more than 3.55 lakh shares of the company at the end of the previous quarter.

During the previous quarter alone, SAIL has seen its stock price rise 65%. Earlier last month, brokerage firm Kotak Securities initiated the coverage of SAIL, finding it to be in a “sweet spot”. “We initiate coverage on the stock with a BUY rating and Fair Value of Rs170 assuming mid-cycle margins and significant upside optionality,” they said. SAIL is believed to benefit from higher prices in steel/ iron ore driven by China’s trade policy changes and supply-side reforms. Analysts at Kotak Securities find SAIL to have improved its balance sheet significantly and expect deleveraging to continue.

The brokerage firm had further added that SAIL’s expansion projects are expected to be completed soon. “The project encompasses capacity expansion, product mix up-gradation, debottlenecking and raw material augmentation,” Kotak Securities said. Big bull hiking stake in SAIL is in line with his recent comments on India’s stock markets and economy. Earlier in June Rakesh Jhunjhunwala, in an interview with CNBC TV18 said that PSU stock could rally. If the government gets its act right, PSU stocks can give you tremendous returns. I have put my money into PSU banks but I think the entire sector can go well,” he had then said. Rakesh Jhunjhunwala had also said that valuations of metal stocks were not fair despite their upward march. The big bull had questioned why Cement stocks are valued at 30-40 times earnings, while steel stocks are valued at 5-7 times earnings and people still doubt such valuations.

news source :- financial express

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