mid-cap crashed

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25 FEB, 2013, 02.21PM IST, ECONOMICTIMES.COM

Mid-cap carnage: Heres why Eros, Orbit, Welspun & others cr

The Times of India | The Economic Times |

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NEW DELHI: Select mid-cap and small-cap stocks plunged in trade on Monday, on growing speculation that the pledgedsold off.

India's largest global education company Core Education plunged more than 60 per cent to mark its largest intraday fall.

at Rs 112.90. It has hit a low of Rs 103.60 and a high of Rs 296 in trade today.

According to ET Now sources, HNI desks at leading brokerage firms are witnessing unwinding of positions. Opto Circuit

where open interest is up over 30 per cent

"Sources also suggest that the mid-cap crash could have been triggered by huge sell orders placed by certain connected

probed," media reports highlighted.

Other stocks include Welspun Corp Ltd BSE -20.69 % which fell 19.80 per cent at Rs 67.25, ABG Shipyard BSE -19.99 %

Communication BSE -19.83 % slipped 19.83 per cent to Rs 3.84, Eros International BSE -5.20 % plunged 6.21 per cent t

per cent to Rs 33.50, at 02:20 pm.

Stock exchanges and market regulator SEBI immediately began looking into the matter to probe any possible foul play af

shares of more than a dozen companies towards noon, a senior official said.

Bombay Stock Exchange also clarified that there is no systemic issue behind micap stocks crash.

Morgan Stanley in a report said that during QE-Dec12, 809 companies have disclosed pledges on their holdings. The pled

cap of stocks of these companies fell to 10 per cent.

As per the SEBI regulations initiated in March 2009, promoters/founders of companies are required to disclose the amou

cap carnage: Heres why Eros, Orbit, Welspun & others crashed - Th... http://economictimes.indiatimes.com/articleshow/18672423.cms?p

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Analyst and management views on mid and small cap sell-off:

Deven Choksey, MD, KR Choksey Securities

Well the reasons of sharp sell of in mid and small-cap stocks are not fully known. However, that these stocks are largely

they are probably covering their leverage positions.

Choksey advises investors to look at stocks as the fundamentals have not deteriorated. Honestly, unless there are issuesby the lenders, Choksey is not too sure whether the fundamentals of the company have weakened anyway.

So honestly I would like to buy more at this point, but it is also important that one needs to clearly establish the reason fo

regulator, SEBI should start looking into this subject and bring the entire branding and borrowing mechanism on to the ma

lending and borrowing must stay within the market and must not be carried out outside the market.

Ram Yadav, Orbit Corporation

The total promoter holding pledged is around 80 per cent but what is more important that we have been maintaining it ove

raised to buy projects and the project that we got we way back in 2010 is slowly reaching to the maturity point and we ha

knowledge there has been no panic them.

We are worried about the sort of carnage happening in the stock. Everything said, we want to maintain that company's o

two major institutions, namely Edelweiss and IFCI to whom shares have been pledged.

And we don't see any kind of panic or issue of revocation of securities from these institutions.

D Datar of ABG Shipyard

The pledged share are already declared and we have checked with all of our financiers and we have checked with all of o

market today. The company's operations are perfectly all right and I don't see any reason of this kind of sell-off in the mar

I don't think pledge shares are any cause of worry. The promoter holding of about 45 per cent has been pledged and that

Kamal Jain, CFO at Eros International

As far as promoter holding is concerned 75 per cent of the stock is held by Eros PLC which is listed on FTSE, and we ha

institutions or banks. The sharp decline in stock price could be because of some individuals stock holder must be selling t

As far as shareholding pattern is concerned, we have a diversified portfolio. Almost 10 per cent of our shareholding is wit

is business is concerned, fundamentals are intact the way it was earlier and we have grown 10-20 per cent before and lik


2/25/2013

mid-cap crashed

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