Mumbai: Shares of PC Jeweller Ltd. have eroded more than four-fifth of its value from its record high of Rs600.65, seen in January, on the back of various issues such as links with Vakrangee Ltd, a gift of shares by promoter Padam Chand Gupta to one of his family members.
Shares of PC Jeweller closed 23.69% lower at Rs110.65 on Monday, logging its eighth straight session of decline.
It trades lower than its offer price of Rs135. The company went public and was listed on 27 December 2012.
At the current market price, two research analysts and one head of investment firm said it was better to stay away from the stock, until further clarity emerged. These analysts and head of investment firm requested anonymity.
Sanjeev Bhatia, chief financial officer at PC Jeweller, told Mint he had no clarity on what was causing the sharp decline in the share price of the stock, and blamed bear cartel for the same. He said the company was fundamentally strong.
“There is nothing fundamentally wrong with the company. We are doing good business. Everything is going well," Bhatia said on phone.
“Someone is just playing around," he added.
Promoter Gupta has gifted some of his shares to his family member or members through off-market transactions and it triggered speculation of further such sales.
State-run insurer Life Insurance Corporation of India held 1.93% stake as at the end of March, while domestic mutual funds collectively held a mere 0.56% stake in the company, shareholding data available with BSE showed.
Foreign portfolio investors (FPI) on the other hand, held 31.22% stake in the company.
Of the prominent FPI holders in the stock, DVI Fund Mauritius Ltd, which held 3.85% stake in the company as at the end of December, did not figure in the list of shareholders that hold more than 1% in the company as at the end of March.
In January, banking and financial services provider Vakrangee Ltd purchased two million shares of PC Jeweller Ltd for a little over Rs112 crore through an open market transaction.
PC Jeweller stock witnessed selling pressure after a stake buy by Vakrangee, as a 27 January report in Mumbai Mirror said that market regulator Securities and Exchange Board of India (Sebi) was investigating an alleged share price and volume manipulation.
Bhatia said that Vakrangee currently does not hold any stake in PC Jeweller.