Pilani Investment to soon trade on national bourses

Mehul Shah & Ashish Rukhaiyar
Mumbai, 27 April 2011

Shares of Pilani Investment and Industries, the investment arm of the Birla family, will soon be available for trading on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

The Madhya Pradesh Stock Exchange (MPSE) is planning to include Pilani Investment among the first list of companies whose shares will be available for trading on the two national-level stock exchanges.

Last week, the Indore-based bourse signed an agreement with NSE and BSE, whereby companies listed on MPSE would be available for trading on India’s two premier stock exchanges under the permitted category. The agreement, under Section 13 of the Securities Contract Regulation Act, will also allow members of MPSE to trade in shares of companies listed on NSE and BSE. MPSE is the first regional exchange to have such an arrangement with both exchanges.

Apart from MPSE, Pilani Investment’s shares are also listed on the Delhi Stock Exchange. However, there has been no trading in shares of companies listed on these exchanges.

“Shares of Pilani Investment are currently trading at Rs 1,750 in off-market transactions,” said a person who has been trading in its shares for long. “Historically, trading in Pilani Investment has been low compared to some other companies listed on regional exchanges. It is very unlikely that Pilani Investment will sell the shares of the Birla firms in which it holds a stake,” he added.

Pilani Investment owns stakes in companies belonging to the BK Birla and Aditya Birla groups. Its major holdings include Century Textiles (36.78 per cent), Grasim Industries (4.69 per cent), Hindalco Industries (1.52 per cent), Kesoram Industries (5.28 per cent) and Zuari Industries (1.47 per cent). At Tuesday’s closing price on BSE, the total value of Pilani Investment’s stake in 14 listed companies comes to around Rs 3,138 crore, according to the BS Research Bureau.

Apart from Pilani Investment, MPSE also plans to include Kriti Industries, Signet Industries, Choksi Laboratories, Star Delta Transformers and Neo Corp International in the first list of about 25 companies to be traded on the national bourses.

There are 303 companies listed on MPSE. Of these, 145 scrips are exclusively listed on its platform. The partnership with the two national-level stock exchanges is aimed at reviving the trading at MPSE after a gap of 10 years. “The objective is to spread equity culture in the smaller towns of India,” said Ashish Goyal, director, MPSE.

MPSE plans to go live with its arrangement with the two national bourses in May. It has already started a membership drive. As of now, the exchange has 75 active members. It charges a one-time admission fee of Rs 2 lakh for membership.

(With inputs from Ashok Divase)