Promoters of BSE-listed SME company EVOQ Remedies dumped about 72 percent of their stake in the past two trading sessions, as the stock rallied to new highs.
The stock hit 20 percent upper circuit on January 10 after the company announced that it has secured a huge export order. It gained another 4 percent the following day, only for the Street to later realise that promoters sold a major portion of their holdings through open market sales.
On January 12, at 10:30 am, the stock was quoting at Rs 16.11 on the BSE, down 4.6 percent from previous close.
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The chain of events
EVOQ Remedies on January 10 disclosed that it has secured an export order of Rs 136 crore, almost seven times its market capitalisation of Rs 22 crore. As per EVOQ's exchange filing, the company bagged the order from Marlexx Pharma, a US-based company, for delivering a range of pharmaceutical APIs.
Investors cheered the huge order win for the small company and rushed to buy the stock. SME stocks are traded in lots, so any heightened demand results in sharp surge, said market watchers.
As the stock surged 20 percent, promoters Bhumishth Narendrabhai Patel and Payal Bhumishth Patel sold 11.5 lakh shares each. The data is available on BSE's bulk deal section.
The stock extended gains for the second day on January 11. On that day, Bhumishth Narendrabhai Patel sold 30.6 lakh shares and Payal Patel sold 18.5 lakh shares.
Also Read: Polycab January 11 crash costs MFs Rs 940 crore, FIIs Rs 1,885 crore
The cumulative selling works out to 72 lakh shares out of the total ~1 crore shares held by the two as of September 2023 end.
What's in a name?
X, formerly Twitter, has been quick to point out how promoters have dumped stock on unsuspecting investors, and flipped the shareholding pattern. As of September end, promoters held 73.5 percent stake while public shareholders held 26.5 percent.
After the stake selling in last two days, promoter stake would now work out to be 20.5 percent only, the X handle @ipo_agarwal tweeted.
Furthermore, a X user has also pointed out that Marlexx Pharma does not exist. A simple Google search shows Marlex Pharma is a New Castle-based pharma company and not Marlexx.
Was the extra X just a typo or a subtle way of promoters saying 'Game Over' to retail investors, one will never know!
Update: We have reached out to the promoters and the story will be updated, when we hear back from them.
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