Varun industries,
a diversified company with its footprints in mines & minerals, oil &
natural gas, stainless steel wares, wind power etc., saw its share down by
around 77 % in just 34 trading days with 11 consecutive lower circuits.
Though
analysts are attributing margin calls getting triggered for such a debacle but
speculation is rife in the market that books were cooked and mineral potential of
the company was overstated.
The website
claimed that company was growing at the CAGR of about 30% (profit CAGR too was
around 20 % as per the books of the company) this figure is difficult to digest
as the same was not reflecting in profit margins.
On last two
trading days there was no lower circuit and a few broking and asset management
companies are trading in bulk to hold the price to ensure exit.
What is
important to note that these companies are selling more than what they are
buying, this clearly indicates that this is nothing but an attempt of
price-holding to get best-possible exit.
Last two
trading days observes exceptionally high 6-month volume. Retail investors
should stay away from this stock and should not get tempted by a rally which
might occur as a dead cat’s bounce or artificial price propping.
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