Shares of Ultracab (India) Ltd hit lower circuit for the second straight session on January 12 as investors dumped the stock following a drastic drop in promoter holding over the last quarter. As of September 2023 end, promoters held 59.59 percent stake in the company which fell to 27.89 percent at the end of the December quarter.
Ultracab ended the day at Rs 23.74 on the BSE, down 4.9 percent from the previous close. In 2017, the cables and wire company had moved to mainboard BSE from the BSE-SME platform.
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The company shared its December 2023 shareholding pattern on January 10, 2024. With promoter stake more than halving, public shareholding has gone up from 40.31 percent in September 2023 to 72.1 percent. During the same time, the stock price rallied from Rs 15 to Rs 28.
Stake sale by promoters is nothing to be surprised about. Several promoters pared stake and booked part profits in 2023, as markets climbed new highs. But promoters need to disclose such trades, which is the missing link in Ultracab.
The SEBI (Prohibition of Insider Trading) Regulations, 2015, says, “Every promoter, member of the promoter group, designated person and director of every company shall disclose to the company the number of such securities acquired or disposed of within two trading days of such transaction if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees or such other value as may be specified.”
Ultracab's current market capitalisation is Rs 225 crore. So, the stake sold by promoters in last quarter would definitely be above Rs 10 lakh, users on the X platform, formerly Twitter.
The last insider trading disclosure made by Ultracab was back in June 2022.
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What happened with Polycab?
The income-tax department said it searched over 50 premises "of a cable and wire company" in December. It unearthed "unaccounted cash sales" of about Rs 1,000 crore, it said on January 10. While no company was named, Polycab told exchanges in December that income-tax department had initiated a search on its premises.
In November 2023, newly listed RR Kabel's offices were also searched by I-T officials. The stock is now down over 18 percent from its peak.
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