The stock has seen an increase of 114 percent since April. Recently the stock reached its year’s high of Rs 536. The stock’s performance has been the highest among all the stocks in the oil and gas sector.
It is very common for a common investor to take a wrong decision regarding a stock in the stock market. But it is very rare that many veteran investors are proved wrong about a single stock. Similar is the case of Chennai Petroleum Corporation. Mutual funds had already kept distance from this stock and the situation was such that the two funds which had invested also completely exited in April this year, but since then, i.e. in just 6 months, the stock has reached 100%. Has increased by more than percent. The situation is that as soon as the momentum is seen, the funds once again started investing.
MF withdrew entire investment
If we look at this year’s figures, IOC’s subsidiary Chennai Petroleum Corporation had lost the trust of mutual funds. According to the data released in March, the total stake of funds in the company was less than one percent. Only two funds, ITI MF and ICICI Prudential MF, had exposure to the company. However, in April they also withdrew their entire stake. In April this year, the company was one of the four companies from which mutual funds completely exited.
How was the stock’s performance?
The stock’s performance was flat until the fund withdrew its money, i.e. at the beginning of 2023. However, with the beginning of the financial year, there was an increase in the stock. The stock has seen an increase of 114 percent since April. Recently the stock reached its year’s high of Rs 536. The stock’s performance has been the highest among all the stocks in the oil and gas sector. The stock has given a return of 153 percent in the year 2023 and 563 percent in 3 years.
Funds returned with gains
With the rise in prices, funds once again returned to the stock and in June ICICI Prudential once again bought stake in the stock. Along with the company’s performance, analysts’ confidence in the stock is also coming back. In a conversation with Money Control, Elara Securities Senior VP Gagan Dixit said that there are signs of growth in the company’s GRM. And it may increase from $11 per barrel to $15 per barrel in the second quarter. At present, Elara Securities has advised to sell the stock but Dixit believes that if there are signs of GRM remaining above $15 for two quarters, then re-rating of the stock is possible.