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Infibeam loses Rs 9,200 crore in m-cap in just 1 day: should you buy, sell or hold?

29 Sep 2018 : 06:12 Comments: 0 Views: 
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Investors’ lost about Rs 9,200 crore in market capitalisation as stock prices cracked 70% in a single session on Friday, the day before the company’s annual general meeting.

The reasons for the collapse could be attributed to the rumours which spread on WhatsApp may have triggered the slide. However, the management of the company clarified in a note that the fundamentals of the company remain intact and there is no information which is pending from the company's side.

Equirus Capital in a separate note said that they have only released a conference note and have not circulated any message on instant messaging platforms.

Infibeam Avenues Ltd, the operator of e-commerce firm Infibeam and the parent of payment gateway company CCAvenue, saw more than Rs 9,000 crore getting wiped out from its market capitalisation in a single day. The market capitalisation fell from Rs 13,105 crore recorded on Thursday to Rs 3,900 crore on Friday.

Most experts suggest investors to stay away from the counter as the recent price action suggests that big hands from the stock might have exited. If we look at the delivery data on the BSE it stood at 28,46,432, almost 4.8 times higher than from last Friday's slide (September 21) when the stock fell over 20 percent and recovered in the very next session.

Deliverable quantity data needs to be analysed along with the share price. When the share price of the stock is moving down with a higher percent of deliverable quantity to traded quantity, it indicates bearishness in the share as most sellers are expecting the share price to go down.

“The deliverable quantity of 28 lakh is very high and almost 4.8 times we saw on September 21 when the stock fell by over 21%. The data suggest that big hands might have exited from the stock and the recovery will take a very long time,” AK Prabhakar, Head of Research at IDBI Capital told Moneycontrol.

“If we look at the stocks which fell on Friday are mostly which have low quality. Investors should analyse stock in their portfolio and if 10,800 breaks mega-correction will follow. The stock appears expensive, and investors could look at exiting from the stock,” he said.

A WhatsApp message generated a few months back suddenly became viral on Friday afternoon wiping off 71% market value of Infibeam Avenues Ltd, according to reports. Incidentally, tomorrow the company is set to have its AGM. 

The message attributed to Equirus Securities Pvt., according to Bloomberg raised questions about company's accounting practice. It said that the company had given unsecured loans and unit free loans to the tune of Rs 135 crore. As Infibeam shares went into a tailspin, the company came out with an explanation. “The company has always provided timely information sought by the stock exchanges. There is no pending information or announcement from the company which may have a bearing on the price behaviour of the scrip,” Infibeam informed in a regulatory filing. 

Infibeam operates in the e-commerce space in the b2b and b2c markets.

The e-commerce firm, which has raised Rs 450 crore through the initial public offer (IPO) is the first e-commerce player in the country to make a stock market debut. Started in 2007, Infibeam runs several e-commerce services like Infibeam.com, BuildaBazaar, Incept and Picsquare

Even after the clarification, Infibeam failed to garner investor confidence as selling continued. It was 73% down at one point of time and ended 71% down at the end of trading on Friday.  The share opened at Rs 190, slumped to Rs 53 and ended the day at Rs 58.45. 

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