Has there been any other business event in India in recent past where speculation abounded as much as it did over Vijay Mallya?
Have there been any other shares that have witnessed as many flip-flops as Mallya's?
A report in Mint today says a $2 billion Diageo-United Spirits deal is likely to be announced this week.
Here are the details of the likely deal: the size is seen at $2 billion; will see sale of promoters' holding, issue of fresh equity and an open offer to public shareholders; Mallya to remain chairman while Diageo will decide the MD and CFO.
Media, both international and domestic, have published umpteen stories about the likely deal over the last few months, ever since troubles at Kingfisher accentuated. Nothing concrete has yet happened.
Will today's Mint report be different? The sources of the information are two UB Group executives and two investment bankers, "none of whom wanted to be identified", the report says.
Will this bit of information help add credibility to the news? One has to admit that Mint always discloses the maximum details of the sources, which is a big relief considering the shoddy practices in the media today.
But one has to remember that Mallya had just two weeks back expressed doubts about the deal actually going through.
Mallya does not know whether a deal for UK drinks giant Diageo Plc to take a stake in his United Spirits will be struck or not, Reuters reported on 27 October.
"Whenever we need to say something we will, we keep discussing but we don't know whether a deal will happen or not," Mallya told Reuters.
On media reports that he would be forced to sell stakes in profitable businesses to fund Kingfisher, he said, "That is the media perspective of what I am going to do."
"I am not so sure that I lack commercial acumen to the extent that I would sell a hugely thriving, successful business to take the cash and put it into an airline in an environment such as India," Reuters quoted Mallya as saying in another report.
Reacting to the comments, shares of United Breweries and United Spirits nosedived.
Interestingly, the impact of such unhealthy speculation on investors dawned on the stock exchanges very late. They imposed a stricter 5 percent movement limit for United Spirits and United Breweries only by end-September.
Mallya's comments to Reuters are a proof of the heightened uncertainty, which is fodder for speculators in the stock market and trap for lay investors.
In Mallya's case, there have been reports that he himself cashed in.
The Business Standard reported last week that United Breweries Holdings had witnessed a more than 8 percent fall in promoter holding during April-September, when reports of a likely stake sale started doing the rounds.
According to the report, the shares of the company had risen three-fold during the quarter.
On Saturday, the newspaper again reported that market regulator Sebi has asked for details of the stake sale done by three UB group firms as it was not intimated to the stock market.
In this background, would it not be better if the media stop publishing stories about Mallya and his group companies until something concrete is known from the company?
Updated Date: Dec 20, 2014 13:27:13 IST