You are using an older browser version. Please use a supported version for the best MSN experience.

J Kumar, Prakash Industries shares hit 20% lower circuit after stay on Sebi order

LiveMint logoLiveMint 11-08-2017 Ravindra N. Sonavane

Mumbai: Shares of Prakash Industries Ltd and J Kumar Infraprojects Ltd on Friday hit 20% lower circuit after the securities appellate tribunal (SAT) on Thursday stayed a 7 August Securities and Exchange Board of India (Sebi) directive labelling them suspected shell companies.

At 9.27am, Prakash Industries fell 20% to Rs111.20. So far this year, it gained 147.12%. J Kumar Infraprojects hits 20% lower circuit of Rs226.95. So far this year, it gained 11%. India’s benchmark Sensex index fell 1% to 31,260 points.

“The damage in terms of perception of these 300-odd companies in the minds of the investor fraternity has already been done. Hence, the window to trade it again will be seen by investors as an opportunity to exit the stock, which technically would bring in selling pressure in these counters,” said an analyst of a domestic brokerage house. Analysts warned investors to stay away from these type of stocks.

Three companies—J Kumar, Prakash Industries and Parsvnath Developers Ltd—on Wednesday approached the tribunal against their inclusion in a list of 331 suspected shell firms against whom the market regulator sought action by stock exchanges.

Sebi had asked exchanges to independently audit these firms and, if necessary, appoint a forensic auditor. Sebi’s communication to stock exchanges had said its directive was based on a 9 June letter from the ministry of corporate affairs (MCA) identifying these 331 firms.

SAT observed that the fact that the regulator took two months to comply with the MCA letter shows that there was no urgency in passing directions without verification of the companies, Mint reported.

More From LiveMint

image beaconimage beaconimage beacon