The Hindu Business Line : Gammon shares plunge but end with gain

Mumbai, July 13 Gammon India’s shares were volatile on Monday after Sunday’s accident at a Delhi Metro construction site, where a bridge collapsed killing six workers and injuring more than a dozen.

Gammon India, a 90-year-old infrastructure building company, was a contractor hired by Delhi Metro Rail Corporation (DMRC) to construct a part of DMRC’s project connecting Central Secretariat with Badarpur near Haryana border towards south-west.

On Monday, Gammon India shares plunged over 17 per cent soon after the markets opened but made a sharp recovery towards the close of the session to close in the green.

Some of the market participants were surprised to see Gammon shares close 2.73 per cent up at Rs 165.60. Gammon shares hit a low of Rs 133 on the BSE.

Analysts were not sure how the shares closed in the green even after the negative development over the weekend.

Gammon was a gainer though shares of other infrastructure companies came under selling pressure due to an overall bearish sentiment in the market. The major infrastructure-related companies whose shares fell on Monday were Larsen & Toubro (2.13 per cent), Reliance Infra (6.10 per cent), HCC (3.49 per cent), IVRCL (4.87 per cent), IRB Infrastructure Developers Ltd (2.93 per cent), Nagarjuna Construction Company (3.50 per cent).

“The fall was a panic reaction, but some funds seem to have bought Gammon India shares later in the day at a cheap price,” said Mr Sandeep Wagle, Technical Analyst, Angel Broking.

Some analysts had other explanations for the rise.

A lot of short positions had been built in the stock and people squared off their positions leading to a surge in the share price, said an analyst.

“That happens sometimes but one can never be sure about it,” said Mr Wagle.

Gammon Infrastructure Projects Ltd, in which Gammon India holds more than 70 per cent stake, also fell sharply in early trade to touch a low of Rs 118.45. Gammon Infra too recovered towards the close, but closed 3.33 per cent lower at Rs 120.50.

In September 2007 too Gammon India shares fell sharply after an under-construction flyover at Panjagutta in Hyderbad fell, killing and injuring several people.

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