Tuesday 10 October 2017

A Vigilant Investor

It is not surprising that Bombay Stock Exchange (BSE) received an important notice about a Stock and on disseminating it stock reacted immediately with an upper circuit. 

However, the news was already published in newspaper a day before.

This is about Adani Transmission Ltd (BSE Code: 539254).
I will reproduce the words appearing in the BSE Website, Adani Transmission, with exchange dissemination time:
“Exchange Received Time 10/10/2017 10:09:58
Exchange Disseminated Time   10/10/2017 10:10:05 Time Taken 00:00:07
Submission of Media Release relating to entering into a period of Exclusivity with Reliance Infrastructure Limited (RInfra) until January 15, 2018 in relation to discussions for the proposed acquisition of the integrated business of generation, transmission and distribution of power for Mumbai City from RInfra.
On 10:09 a.m the price was Rs.181.00 by 10:12 a.m. the stock hit upper circuit Rs.193.15.
Business Line newspaper (online dated October 09, 2017) reported the following (select portion from the online news is presented below):
MUMBAI, OCTOBER 9: Anil Ambani-led Reliance Infrastructure Ltd (RInfra) has announced transferring its Western Region System Strengthening Scheme (WRSSS) transmission undertakings to its two subsidiaries as part of the process to sell the businesses to Adani Transmission Limited.
RInfra and Adani Transmission have signed a binding termsheet agreement for RInfra’s three operational transmission projects —WRSSS B, WRSSS C and Parbati Koldam Transmission Company Limited (PKTCL), which is a joint venture company of RInfra and Power Grid Corporation of India (each having 74 per cent and 26 per cent equity respectively) in 2016.
Under this transaction, Adani Transmission would acquire 100 per cent ownership in WRSSS B & C and 74% ownership in PKTCL. WRSSS B & C transmission projects and stake in PKTCL …...
Post reading the news in Business Line (assuming news was published post exchange closing hours) next morning i.e. 10th October 2017 at 9.15 a.m. Adani Transmission should have hit upper circuit.
However, the curious aspect, information was already intimated to BSE by Reliance Infrastructure Limited (BSE Code : 500390) on October 09, 2017 at Exchange Received Time 09/10/2017 14:49:56 Exchange Disseminated Time 09/10/2017 14:50:00.
It appears Adani Transmission Ltd intimated the news late to BSE.
Will BSE officials take cognizant of it and take action on Adani Transmission Ltd for not submitting news on the same day itself. 
A vigilant investor / the reporter / Reliance Infra shareholder could have purchased Adani Transmission Ltd on October 09,2017 at 3.00 p.m. when the rate was Rs.174.25 and enjoyed a 10% return on next day.
Reference:

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