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GOSSIP & TALES: What's Cooking In Religare Enterprises?

Below is a prime example of how some anticipation in the stock market always pays

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In the stock markets, it is often said that company insiders know better than the streets and you should follow them when they buy or sell shares in hordes.

Many senior employees of Religare Enterprises, who were holding shares under the Employee Stock Options (ESOP) scheme, went on a selling spree between 19th to 22nd September. When the markets closed on Friday, September 22, the share price of Religare Enterprise was around Rs 271 and it had touched a 52-week high of Rs 281 just the previous day. For all four days of the said week in September, the share price of Religare Enterprises was hovering near its all-time high levels or just a tad lower than that. It simply meant that the employees could sell their shares at the best price before an important event.

On September 25, Monday, at 8:34 AM before market opening, an announcement on BSE said that the famed Burman Family of the Dabur group was making an open offer to acquire 26 per cent shares of Religare Enterprises. For the streets, this was good news since the beleaguered Religare Enterprises was finally going into good hands, since the Burman Family is cash rich and known to grow businesses. Eventually, this would mean that the Burman Family, which would be the single largest shareholder of the broking and financial services firm, may also likely take the management control.

But to the surprise of many, the share price of Religare actually fell. The catch in the announcement was that the Rs 2116 crore open offer was being made at Rs 235 per share against the Friday's (September 22) price of around Rs 270.

It is a prime example of how some anticipation in the stock market always pays.

Contributed by PS

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Gossip & Tales religare enterprises