How an LG mix-up sent LG Balakrishnan shares to a 52-week high on Oct 14

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A rush to buy newly listed LG Electronics India on its market debut Tuesday led to an amusing trading mix-up, with some investors mistakenly purchasing shares of a similarly named company, LG Balakrishnan and Bros, a Coimbatore-based auto component maker.

According to a report by the Economic Times (ET), as investors scrambled to get an early slice of LG Electronics’ listing gains, a number of them apparently entered the wrong ticker, ending up with LG Balakrishnan shares instead. The company, founded in 1937, is a relatively thinly traded stock with a market value of around Rs 4,372 crore as of Tuesday’s close.

Trading data showed that combined volumes on the BSE and NSE jumped to over 6.8 lakh shares, a massive surge compared to the two-week daily average of just 31,400. In early trades, the stock shot up nearly 15 per cent to Rs 1,600 on the NSE before retreating to end 1.6 per cent lower at Rs 1,367.60, likely after investors realised their error and exited their positions.

Such cases of mistaken trades are not rare in Indian markets. Similar confusion has occurred with Tata Motors and its Differential Voting Rights (DVR) shares, particularly on news-heavy days, when retail investors rushed to buy Tata Motors stock but inadvertently picked up DVR shares instead.

Globally, one of the most memorable examples came during the early months of the Covid-19 pandemic, when investors confused Zoom Technologies, a defunct Chinese mobile firm, with Zoom Video Communications, the popular video conferencing company. The mix-up sent the wrong stock soaring nearly 1,800 per cent before US regulators suspended trading to curb the frenzy.