The Hindu Business Line : Bombay Dyeing stock plummets after clarification

Mumbai, Dec. 7 The stock price of Bombay Dyeing and Manufacturing Co. Ltd plummeted after the company announced that their projects are not covered under the Urban Land Ceiling Regulation Act.

As per the company’s announcement made on the BSE Web site, it was stated that the repealing of the Act would not have any sort of impact on the company at present or in its future endeavours.

The share prices of the company dropped by 4.07 per cent touching an intra-day low of Rs 713 and a high of Rs 777. The shares ended the day at Rs 725.

Beneficiaries

When the news of the repealing of the Urban Land Ceiling Regulation Act was announced, reports predicted that Bombay Dyeing would be one of the major beneficiaries.

According to those reports, the company was sitting on approximately 2,000 to 3,000 acres of land which would have got freed once the Act was annulled. The company’s stock prices gained around 3 per cent on the backdrop of this news on November 30.

“Investors seem to have gone on a buying spree based on speculation. There was a lot of speculative buying taking place based on certain reports. That is why we saw the share prices of the stock sky-rocketing in the past few days since the revoking of the Urban Land Ceiling Regulation Act,” said an analyst with a brokerage.

Speculative Positions

Due to the speculative trading seen in the past few days, the company has decided to clarify itself and its position, believe analysts. That seems to be the reason why the company made the announcement.

“The company would not want its prices to go up based on speculations, which is the main reason why they came up with this clarification. And now it looks like the speculative positions have been wound up after the clarification,” said Mr Pankaj Bhansali, Religare.

Analysts believe that the share prices of the company will begin to stabilise. “They have their own assets and valuations based on which the investors have been investing before the news of the repealing of the Act. The share prices will now start to stabilise and get corrected,” said Ms Anita Gandhi, Head Institutional Business, Arihant Capital Markets Ltd.

More Stories on : Stock Markets | Stocks | Real Estate & Construction | Textiles

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page