Since the last article, the Zuari group has increased its stake to about 16%, while the Deepak Fertilisers group continues with its previous holding of roughly 24.5%. The third player in the drama who is the promoter is now holding under 21% with the bulk being pledged.

Over the last few days the bulk holders of shares have been selling and Reliance Mutual Fund has sold 15 lac shares to the Zuari group. Acquiring shares from the open market is now going to be a tough game until the next core of action is announced. One of the two contenders have to announce an open offer which will remove the uncertainty about the event and therefore the premium of the uncertainty would reduce. Secondly what could also happen is that the lenders negotiate a deal with either of the prospective bidders so that the role of Mr Mallya is reduced.

It’s just a matter of few days before the issue would become clearer. As mentioned in the earlier articles the price is all there and now trying to enter the stock may just not be worth it. Trade in Mangalore Chemicals and Fertilisers only if you have deep pockets or a strong heart as the volatility is likely to increase sharply.