INSUBCONTINENT EXCLUSIVE:
NEW DELHI: PC Jeweller (PCJ), once a darling of foreign investors on Dalal Street, has been on a rollercoaster ride on one or the other
rumours, even since a company promoter gifted some shares to some undisclosed relatives.
Allegations about the PCJ's undisclosed business
relations with Vakrangee, a company market regulator Sebi has been probing for alleged price and volume manipulation in its stock, have left
investors jittery.
The stock witnessed a sharp plunge over the past five months, falling from Rs 606.65 on January 16 to Rs 95.05 on March 5
Last week, it suddenly started a bounceback, surging some 100 per cent in three sessions, only to give up some 16 per cent on Tuesday.
The
company management has denied all allegations, and served clarifications from time to time, assuring investors of its strong fundamentals
The sharp fall in the stock has prompted the company to mull a share buyback, which it is now trying to speed up in a bid to allay investor
concerns.
There was a lack of confidence in the company, which is why the stock has tanked, Anand Tandon, an independent market analyst,
less than Rs 2 lakh in a stock, to double their bets on the jeweller in March quarter
But the recent seesaw movement in the stock has unnerved them.
Ace investor Porinju Veliyath on Tuesday termed the stock behaviour as
Porinju is the Founder CEO of investment firm Equity Intelligence India.
Small investors held 2.31 per cent stake in the Delhi-based
jeweller as of March 31, up from 1.23 per cent at the end of December quarter
While the stock has risen 111 per cent from its 52-week low, hit on May 3, low stock deliverables hint at speculative trading on the
counter.
Data compiled by ETMarkets.com for the ongoing calendar showed stock deliverables as percentage of total volumes on the counter was
as low as 10 per cent on BSE in one of every three sessions in 2018
It was below 25 per cent for nine out of 10 sessions.
On NSE, deliverables were lower than 25 per cent in half the trading sessions.
The
average turnover on the counter in last one month stood at Rs 887 crore on NSE, which was four times its daily average, data compiled from
database Capitaline suggests
What you are seeing seems to be some kind of informed buying or inner-circle buying just to restore confidence
said.
Around 2017 yearend, reports emerged that Padam Chand Gupta, one of the promoters, gifted nearly 2 per cent of his 26 per cent holding
in the company to a relative, whom the company did not identify
Investors feared more such deals in the future, leading to sale of shares in open market, which, if happens, can affect share price.
Fund
manager Fidelity International last week cut its holding in the stock by a half, shedding more than two-thirds of their original stake in
Overseas portfolio investors held 31.22 per cent stake in the jewellery maker as of March 31, 2018, which was their highest-ever holding in
the firm, shareholding data suggests.
In March quarter, speculations around undisclosed business relationship between PCJ promoters and
those of e-governance service provider Vakrangee triggered panic selling on the counter.
The jewellery firm said none of its promoters had
diluted stake in the company and none of their shares are pledged as collateral with any institution.
"We have seen too many of these things
So I would suggest it is better not to be dabbling in stocks where there are question marks over such issues, which have not been yet
Ebitda margin improved despite an increase in advertisement spends, because of around 50 per cent growth in the high-margin diamond
jewellery segment.
Analysts see further margin improvement for the jeweller as the company has reduced focus on the low-margin export
