Strike of Mandadis in the falling market

In the weekend, the market situation gave weapons to the Mandadis to attack shares. In recent weeks, many high profile companies such as Saint Kalyan Jewelers, Motilal Oswal Financial Services and Ola Electric have hurt their prices within a few days.

Sources inside the market revealed that the delicate shares with expensive evaluation, mortgage shares of promoters and delicate shares with negative news have been captured by Mandadis whose income could be weakened. Shares with futures and option segments are also suffering as they are easy targets for short sellers. The reason is that there is no limit of trading here, which makes them critical during the pressure of heavy selling.

In some cases, the shares have faced the mandis attack due to unfounded rumors and allegations. For example, Kalyan Jewelers’ stock reached an all -time high of Rs 795 on 2 January after more than doubled in the last one year. Despite the information about the third quarter strong by the company on 6 January, the stock lost about 40 per cent in just 12 trading sessions due to unconfirmed rumors on social media. Company and asset management company Motilal Oswal gave clarification on rumors. Despite this, the share prices did not get much relief.

Devi Shubhakshan, an analyst at the Samartakarma publisher Investory, said that short sellers would have bet on the possibility of a sharp decline in the share price, which would have potentially received a margin call on the mortgaged shares. In such a situation, the promoters may be forced to pledge the margin call and pledge shares.

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He said that the stock shows the fragility of high expressions and the bookies on the mortgaged stocks of the promoters. The company’s fundamentals are though strong. But the market uproar and external pressure are constantly examining the trust of investors.

After social media posts, Motilal Oswal’s stock also lost more than 30 percent. In these posts, it was alleged that his asset management company officials were bribed to invest in Kalyan Jewelers. The company has described these allegations as baseless, malicious and defaming.

Out of the list of the leading 500 shares, there are about two dozen shares whose value has been reduced by a quarter so far this month. If we look at the overall listed shares, then around 500 shares are now trading at half of their highest evaluation. The fresh hunting of the mandis has been a hunt, whose stock declined by 23 per cent on Friday when unconfirmed rumors of Cartikeyan Natarajan’s resignation spread.

The founder and research head of Equinomics Research G. Chokalingam said that the storm of macro and micro (macro and micro) challenges has shown severe recession winds. Apart from this, there are also adverse conditions like FPI’s frequent selling, weakness in rupee and uncertain policies of America. Meanwhile, there are also concerns of high evaluation and softening in earnings.

Experts said that investors should take care in the current market environment, especially when it comes to investing in high P/e multiplier or high debt level or more mortgaged shares. Chokalingam said that many shares still have extraordinary expressions and are the most fragile. Earnings should ideally increase by 100 percent with a 1p/E growth ratio. However, many of these shares are also struggling for an income increase of 20 per cent. Shares of high prices and new generation companies are currently suffering it.

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