Bharati Shipyard: Up 17% in the last two days

Bharati Shipyard has seen an increase in buying interest.

It is up 17% in the last two days, when the market has remained flat. It rose upto 15% in todays' trade, and settled 11% higher. The stock is up 22% in this month.

Today, the stock had very high volumes with 20 lakh shares being traded in the BSE and 30.35 lakh shares being traded in the NSE. Bharati Shipyard has a share capital of 2.76 cr, and 50 lakh shares represent close to 18.1% of the total shares, being traded today.

An SAST/PIT disclosure is expected in the coming week.

Bharati Shipyard has floated an Open Offer for the shareholders of Great Offshore, after acquiring nearly 20% stake from the promoters and their relatives (the Sheth Family). ABG Shipyard has countered the offer multiple times, with its current offer price being Rs. 520, where as Bharati Shipyard's open offer price has not been revised yet, and has been Rs. 405 till date. Bharati has the first mover's advantage, having acquired the 20% stake rather cheaply. ABG has close to 9% stake in Great Offshore. Both companies have shown interest in gaining management control of Great Offshore. Bharati also has previous associations with Great Offshore, and a significant part of its order book comprises of rigs ordered by the latter.

The recent spurt in Bharati Shipyard's share price, as compared with a relative slump in that of ABG Shipyards' has created speculation that Bharati may just have managed to acquire the required 26% to gain board seats in Great Offshore, or has plans to increase its offer price.

The offers end on Aug 27,2009. The last date for revising the price of the Offer is Aug 21,2009.

A price war may prove detrimental to Bharati Shipyard's stretched balance sheet. Bharati Shipyard has a pending order book of Rs. 3,000 cr. According to ABG's website, its order book position is Rs. 15,000 cr.