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Business News/ Market / Stock-market-news/  Sun TV shares soar as much as 27% after clean chit to Marans in Aircel-Maxis case
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Sun TV shares soar as much as 27% after clean chit to Marans in Aircel-Maxis case

The Sun TV shares closed up 24% at Rs683.85 against the previous session's closing of Rs551.85

A file photo of former Union telecom minister Dayanidhi Maran, an accused in the Aircel-Maxis case. Photo: MintPremium
A file photo of former Union telecom minister Dayanidhi Maran, an accused in the Aircel-Maxis case. Photo: Mint

Mumbai: Shares of Sun TV Network Ltd on Friday surged as much as 27%—its biggest gains since at least April 2006—after brokerages upgraded the stock and increased its target price as the special CBI court dropped all charges brought by both the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) against the Maran brothers, Dayanidhi and Kalanithi, in the Aircel-Maxis case.

The stock touched a record high of 699 a share on BSE—up 27% from the previous close.

The shares, however, pared some of the gains during the closing hours. The Sun TV Network Ltd shares closed up 23.92% at Rs683.85 against the previous session’s closing of Rs551.85 while India’s benchmark Sensex rose just 0.05% to 28240.52 points..

“Lower legal and political issues are significant positive,’ CLSA said in a note to its investors. Brokerage firm has upgraded the stock to Buy and increased its target price to 661 a share.

Kotak Institutional Equities said in a research report that the clearance from court addresses the key investor concern and frees promoter bandwidth allowing sharper focus on the business. Kotak has upgraded the stock to “Buy" from “Add" and increased its target price to Rs700 a share from Rs525 a share.

The Aircel-Maxis case is related to allegations that as telecom minister Dayanidhi Maran used his influence to coerce Aircel owner, C. Sivasankaran, into parting with his stake in the company to T. Ananda Krishnan-led Maxis Communications Berhad.

This was allegedly done in lieu of investments by the Malaysian company through an arm in Sun Direct TV Pvt. Ltd. Dayanidhi Maran is one of the promoters of Sun Direct and was the telecom minister between 2004 and 2007.

The CBI had filed a chargesheet against the Maran brothers, Ralph Marshall, Maxis owner T. Ananda Krishnan, and four companies—Sun Direct TV, Astro All Asia Networks Plc, Maxis Communications Berhad, and South Asia Entertainment Holdings Ltd, Malaysia. Marshall was the chief executive officer of Astro All Asia Networks.

It was alleged by Sivasankaran that Dayanidhi Maran favoured the Maxis Group in the takeover of his company. In return, he alleged, the company made investments through Astro in South Asia FM Ltd (SAFL), a company stated to be owned by the Maran family.

In a separate money laundering case, the ED chargesheeted the Maran brothers, Kalanithi’s wife Kavery, managing director of SAFL K. Shanmugam, SAFL and Sun Direct TV under provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

The ED alleged that the two firms, SAFL and Sun Direct TV, received Rs742.58 crore as proceeds of crime from Mauritius-based firms and that the two firms were then allegedly controlled by Kalanithi Maran.

The company will announce its December quarter earnings on 10 February. According to 11 Bloomberg analyst estimates, the company may post net profit of 233.80 crore while net sales will be at 609.10 crore.

Of the analysts covering the stock, 16 have a “Buy" rating, six have a “Hold" rating, while no brokerage has “Sell" rating on the company, shows Bloomberg data.

Reliance Communication Ltd surged 18%, its biggest gains since March 2011. Recently, The Economic Times has reported that the Telenor has expressed its willingness to combine its business, customer base plus spectrum with the merged Aircel-RCom entity.

However, the RCom has clarified to the stock exchanges that, “The company don’t comment on speculation and rumours. Developments, if any, which concern stake-holders of the Company, will be intimated in due course and at appropriate time

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Published: 03 Feb 2017, 10:07 AM IST
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