Alkem Labs block deal: Stock poised for rally, MSCI inclusion likely, says Nuvama

Block deal: Alkem Laboratories Ltd  (Alkem Labs) is likely to see selling of 0.7 per cent stake or 8.5 lakh shares by a promoter, through block deals today. As per media reports, the floor price for the stake sale has been fixed at Rs 5,616 per share, which is at 3 per cent discount to Wednesday's closing price.

Abhilash Pagaria of Nuvama Alternative & Quantitative Research said even after the deal, there would not be any incremental impact on the free float and the free float will largely remain the same.
 
"Now, if the promoter and group sell an additional 80 bps to 1 per cent or more of their stake in this quarter (over and above current stake sale of 70 bps), there is a strong possibility of an increase in free float. In such a scenario, the stock could directly qualify for MSCI Inclusion in November 2024 at current prices," Pagaria said.
 
Alkem Laboratories shares are up 11 per cent in the past one month and 53 per cent in the past one year.

At the prevailing free float,  the current price of Rs 5,770, and based on current global cut-off levels, Nuvama believes the stock could qualify for MSCI Standard Index inclusion at levels above Rs 6,300-6,400, representing a surge of 12-14 per cent. 
 
"We at Nuvama Alternative continue to believe the stock is poised for a rally and is a strong contender for the MSCI November 2024 Review, which could lead to passive inflows of approximately $160 million ; 2.3 million shares which is 7-day impact," it said.