Oxygen shares, real and imaginary, rally as India battles virus surge

Gagan Gases

20/04/2021 07:48

By Sachin Ravikumar
    BENGALURU, April 20 (Reuters) - With Indian COVID-19
patients struggling to find medical oxygen in the middle of a
second deadly wave of coronavirus infections, shares in
companies that produce the gas — or simply have it in their
names — are rallying.
    Bombay Oxygen  BOXY.BO , National Oxygen Ltd  NTOX.BO  and
Bhagawati Oxygen Ltd  BHOX.BO  — all tiny firms not listed on
any major stock index — have surged 47% or more in April, a
period in which India's broader market  .NSEI  has slumped 2%.
    Over the past few days, India has ramped up oxygen
production nationwide as supplies of the gas have fallen short
and infections surge. Hospitalised COVID-19 patients who are
seriously ill often need supplemental oxygen to increase its
supply in the blood and lungs.
    Meanwhile, prices for oxygen cylinders in many parts of the
country have more than doubled.
    National Oxygen and Bhagawati Oxygen produce industrial
gases including oxygen, but Bombay Oxygen ended its gas
operations in 2019 and is now a non-bank lender, according to
its latest annual report.
    Formerly known as Bombay Oxygen Corp Ltd, it is now Bombay
Oxygen Investments Ltd. Its shares have climbed 112% since the
start of April. They fell 5% on Tuesday.
    A portion of Bombay Oxygen's website, however, still says it
makes oxygen and other industrial gases. Reuters could not reach
company representatives for comment.
    "Once COVID-19 cases start going down, and oxygen supplies
go up, the prices will come to normal levels and the stocks
should go back (to earlier levels)," said Rusmik Oza, senior
vice-president at Kotak Securities in Mumbai.
    Shares in notable gas producers like Linde India Ltd
 LIND.NS , the local partner of the U.S.-German industrial gas
maker Linde  LIN.N , have more than doubled since the end of
January, around the time India's second wave of COVID-19
infections began.
    Petrochemicals companies including Reliance Industries Ltd
 RELI.NS  and Indian Oil Corp  IOC.NS  have begun supplying
medical oxygen to plug the shortage. Shares in both companies
are down about 4% each this month.
    Shares of Gagan Gases Ltd  GAGA.BO , a distributor of fuel
gas commonly known as LPG, have also climbed 47% this month -
despite not having any significant news. A Gagan plant manager
said the company does not produce oxygen. Reuters could not
reach other representatives for comment.
    It may be a case of success by association, but it is also
short-lived.
    "It's an opportunistic, tactical trade," Kotak's Oza said.

 (Reporting by Sachin Ravikumar in Bengaluru; Editing by Bernard
Orr)
 ((saisachin.r@tr.com; +91 80 6182 2754; Twitter: @sachinr27))