Shah told CNBC-TV18, "There isn't any question of entering Spice Communications because this is a grossly overpriced stock, I would recommend existing investors who are holding shares of this company to exit, the stock has moved up 200% in last 15 days it was at Rs 30 levels in last week of January and this absolutely without any fundamental reasoning."
He further added, "The fundamentals are absolutely pathetic and it reported Rs 400-500 crore for last year for December 2008 and even in the current year I don't expect it to written back to profitability, so giving it market cap of Rs 6,000 crore this is too much for this company, the reason for the stock spurting is because of low floating stock, Telecom Malaysia holds about 49% stake in this company Idea Cellular along with its other investment companies is holding another 49%, so there is hardly 1-1.5% floating stock in the market and that's the reason why some players in the market are actually jacking up the stock price but fundamentally there is nothing which makes one comfortable even holding on to the stock, so I would suggest a strong sell."
He further added, "There are a lot of companies like this in the market which are quoting at absurd valuations, another example would be Aakruti City, all realty stocks have crumbled but this stock is still quoting Rs 1,000 levels, it can tumble by 90% but it because of low floating stock it is just getting ramped by the promoters and some players in the market."
