Heard on the Street (Source: ET)

Idea Cellular counter hums with activity

Shares of telecom player Idea Cellular have been steadily inching up in a sluggish market. Dealers tracking the counter say institutional investors have been regular buyers in the stock of late. These include a couple of leading domestic fund houses and a private sector insurance firm affiliated to a leading domestic bank. Talk is that the bulls at the counter are expecting some positive development shortly. But analysts say the purchases could have to do with the stock being reasonable valued compared to its peers. They add that company’s stronger balance sheet would support valuations, which have improved after Telekom Malaysia infused Rs 730 crore for a 15% stake through preferential allotment, and receipt of another Rs 210 crore from its stake sale in Aditya Birla Telecom. The stock closed at Rs 48 on Tuesday, and has gained around 12% over the past one month.

Dubai infusion lands Indian bank in trouble

Ambitious investment in a prized overseas real estate project has landed a mid-sized Indian bank in soup. If market sources are to be believed, the international branch of the bank had helped a cash-strapped Dubai-based real estate company by crediting a few hundred crore, about Rs 700 crore, according to brokers, to meet working capital needs. Equity analysts tracking banking sectors are not very happy by the magnanimous gesture of the Indian bank. “The real estate sector in the Gulf has been badly hit, like in many other markets . Almost all companies were constructing high-end flats, which rarely find takers during recession; the slide in crude prices will aggravate the pressure on real estate companies to find buyers,” said a Mumbai-based broker. According to analysts, real estate in the Gulf is expecting a near-25% price decline over the next three months. “It will be interesting to see when the Dubai-based property company will be able to repay the money it owes to the Indian bank. In all probability, it will ask for a term extension; that is, assuming, Gulf-based companies are not allowed to go bankrupt by authorities,” the broker added.