Prakash Gupta, CEO of Core Projects said that the promoters’ holding in the company was intact and that no margin calls had been triggered. He attributed the fall in share prices to the unwinding of HNI positions.
The Core Projects stock has fallen from more than Rs 250 on October 8 to Rs 75 at present. Market reports suggest that one big operator had pledged shares which results in stop losses getting triggered.
Commenting on the price fall, Prakash Gupta, CEO, Core Projects , said promoter holdings is still intact. “One reason could be that approximately 20 lakh FCCB shares were converted last month. In view of the global meltdown these shares could have been sold in the market. Also, some high networth individuals have some position in the company. This fall in price could be a result of some unwinding of positions.”
He said the entire FCCB amount hasn’t been converted yet. “The FCCB were worth USD 80 million and approximately USD 15-16 million still needs to be converted.”
Here is a verbatim transcript of the exclusive interview with Prakash Gupta on CNBC-TV18. Also watch the accompanying video.
Q: What is your own guess of why the stock has taken such a beating? Is it all because of the Foreign Currency Convertible Bonds (FCCB) shares coming into the market? The market is rife with rumours that promoter shares, which were with brokers, is also up for sale because of margin calls?
A: This has got nothing to do with the promoter shares. The promoter stake is as it originally was. There is a global meltdown in markets. One reason could be that approximately 20 lakh FCCB shares were converted last month. In view of the global meltdown these shares could have been sold in the market.
As a company we are doing very well and are very healthy. We are growing as per our plan of 30% organic growth.
Q: There was also a rumour about one or a couple of big brokers who have huge stake in your stock are selling it probably faced with margin calls themselves. Could you investigate, could you get any clarity on - who other than the FCCB holder’s could be selling your stock?
A: We don’t comment on the market rumours but however, yes this is true that some High Networth Individuals (HNIs) have some position in the company and this fall in the price could be the result of some of the unwinding their positions.
Q: Has the entire FCCB amount been converted? Or is there a chunk that gets converted later on?
A: No, there are some more conversions yet to happen. The FCCB was worth USD 80 million and approximately USD 15-16 million still needs to be converted.
Q: When does the remaining amount get to see conversion?
A: The conversion price is much higher than the market value right now. So we don’t know when the market is going to hit that price and when that conversion will happen.
CORE Education stock price
On November 26, 2015, CORE Education & Technologies closed at Rs 2.82, up Rs 0.13, or 4.83 percent. The 52-week high of the share was Rs 14.00 and the 52-week low was Rs 2.56.
The latest book value of the company is Rs -7.35 per share. At current value, the price-to-book value of the company was -0.38.
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