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Feb 27, 2013, 11.22 AM IST
The sell-off in midcap shares intensified on Wednesday, with rumours swirling that the promoters of some of these companies could be teetering on the edge of bankruptcy.
Core Education is the biggest loser among the battered stocks, down around 36 percent over its previous close to Rs 71.40. The stock which had closed at Rs 295 last Friday has shed 75 percent in the last three sessions alone. On Monday, the management had denied that the fall had to do with sale of shares pledged by the promoters. Brokers tracking the stock said such a steep fall in the stock without any fundamental change in the company’s business points to fire sale of pledged shares pledged by either the promoter or some big trader.
Other big losers at this hour include ABG Shipyard, Gravita India, Titagarh Wagons,
Educomp Solutions, Opto Circuits, PG Electroplast, Rushil Décor and Plethico Pharma, down between 11-20 percent. Trading in many of these stocks have been frozen at the lower end of the intra-day circuit filter for want of buyers.
In the past many promoters have come close to losing control of their firms, or in some cases, even lost control, after their shareholding dropped sharply because of sale of pledged shares.
Brokers say a large number of stocks which have been hammered in the last couple of weeks are characterized by weak fundamentals, dodgy accounting practices, and operator interest.
Sebi has already ordered a probe in to the crash, and given the magnitude of the crisis, is likely to come up with a preliminary report shortly. There was a similar sell-off in midcaps last July. The regulator identified the 19 entities alleged to have hammered the stocks, in less than a month and took action against them.
At 09.17 AM, the Sensex was up 89.13 points at 19104.27, and the Nifty gained up 32.65 points at 5794.00. Top largecap gainers on the indices were Bhart, Sterlite, BHEL, Jindal Steel, HDFC, DLF, JP Associates and Sesa Goa.
Jun 18 2013, 22:39
- in MARKET OUTLOOK
Jun 18 2013, 22:39
- in Business