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Sensex gains; Core Education, ABG, Welspun crash


Mid- and small-sized stocks slumped on Monday amid concerns that pledged shares in these firms might have been sold in the open market. The sharp selloff in broader markets was in contrast to the gains in benchmark Sensex and Nifty, which traded 0.4 per cent higher as of 2 p.m.

Core Education was the worse affected, falling as much as 65 per cent to Rs 103.60 before making some recovery. Core Education, India's largest global education company, provides transformational and innovative solutions in the education space. The stock was down 61 per cent to Rs 114.90 as of 2 p.m.

Shipbuilder ABG Shipyard fell 20 per cent to Rs 288. Welded steel pipe maker Welspun Corp also traded 20 per cent lower at Rs 67.40.

Controlling stakeholders of Indian companies often receive loans from financial institutions, pledging their shares as collateral, making these stocks vulnerable to any rumours of liquidations.

Shares in Bangalore-based manufacturer of invasive and non-invasive medical equipment Opto Circuits (India) were down 9 per cent at Rs 54.15. Opto Circuits shares witnessed huge selling pressure last week as well, ending down 13.65 per cent.

Videocon Industries traded 9 per cent lower, while DB Realty shed 7 per cent.

Shares in Eros International Media recovered after the company clarified that its promoters have not pledged shares.

"Our business fundamentals remain intact. We don't know the reasons, but think an individual stock holder who held position has sold. The promoters hold 75 per cent stake in the company and none of our stocks are pledged," Kamal Jain, group GFO at Eros said.

Eros shares were down 4 per cent to Rs 186. Mumbai-based realty developer Orbit Corp was down 13 per cent.

Ram Yadav of Orbit Corp said he is in touch with institutions with which the company's shares are pledged.

"There is no information that these shares have been released in the market and don't see any reason for panic," Mr Yadav told NDTV.


(With inputs from Reuters)

Story first published on: February 25, 2013 12:58 (IST)

Tags: Core Education, Opto Circuit, Welspun Corp, Videocon, Sensex, Nifty




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