Mumbai, Jan 21 (IANS) After a heavy sell-off by the end of last week, stocks of Sun Pharma closed nearly 2 per cent higher on Monday after the company claimed the reports against it of unfair business practices were asymmetrical and asked market regulator SEBI to examine the issue.
Sun Pharma stocks which ended at the bottom five among the 30 stocks on Sensex last week, closed with third highest gains on Monday.
It closed at Rs 398.35 a share gaining 1.94 per cent from its previous close of Rs 390.75.
On an intra-day basis it touched a high of Rs 406.35, rising by 4 per cent from the previous close.
"Continuing with the momentum from the last hour of trade on Friday, the stock price of Sun Pharma rose in the first hour of trade on Monday. After remaining in a range till about 2 p.m, it slid and gave up part of the gains to close 1.9 per cent higher (down from 4 per cent increase at the day's high) on Monday," said Deepak Jasani of HDFC Securities.
According Jasani, stock prices soared earlier in the day due to bargain buying, and as they touched the day's high some investors took to selling which resulted in a drawing back in gains.
"Investors are hoping for clarification from the company on allegations of loans to related parties, transactions with related parties, investment in real estate, low tax payouts in the past etc," he said.
Jasani, however, said although all the allegations in the latest whistleblower complaint may not be right, as long as the company refuses to come clean and set its house right in a predefined time period, investors could remain hesitant to take a large exposure to the stock.
The pharmaceutical major had written to the Securities and Exchange Board of India on Friday claming there is "great asymmetry in information circulating between analysts, investors and the media".
Sun Pharma lost the most in the previous week. It logged its higgest fall on Friday -- its biggest fall in over two years -- after a second whistleblower letter emerged, levelling allegations relating to corporate governance.
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