Perpetual buys 12% stake in Lanka Ashok Leyland for Rs. 450 m

New kid in the market Perpetual Capital Ltd-controlled by Arjun Alosius yesterday bought a 12% stake in Lanka Ashok Leyland for an estimated Rs. 450 million.

The Company had collected 448,300 shares amounting to 12.38% stake. Yesterday a total of 465,500 shares of illiquid Lanka Ashok changed hands via 101 trades for Rs. 479.4 million. Of the lot traded a big block of 449,500 shares was done at Rs. 1,000, about Rs. 2,000 below its previous closing price. Eventually Lanka Ashok closed at Rs. 2,383.30 down by Rs. 650 or 21.4% whilst its highest yesterday was Rs. 2,500.

The seller was longstanding shareholder and director Saliya Perera who continues to hold a further 15% stake. Indian giant Ashok Leyland’s Lankan entity controls 69% in the company.

Perpetual’s investment in Lanka Ashok is on account of strong upside in the transportation and construction sector in post-war Sri Lanka.

Part of Free Lanka Group, the investment fund has been highly active in the market picking up stakes in Ceylon Grain, HDFC Bank, DIMO and Bairaha in recent months.

Trading after Jan.  21st Ashok lands in the band!

The 10% price band was slapped on Lanka Ashok Leyland from 18 February 2011 to 11 March 2011 (both days inclusive).

The capture under the band was despite the stock declining by Rs. 650 to Rs. 2,383.30. It last traded only on 21 January but got caught to the band yesterday. This however contradicts the SEC’s formula to determine which stocks must be slapped with the price band. Ashok’s all time high price of Rs. 4,300 was recorded on 21 October whilst it closed 2010 at Rs. 4,050.