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Emami Infra shares crash 86% after listing

The shares of Emami Ltd’s newly spun-off realty arm have tanked massively on listing day, raising doubts about price manipulation amid lack of transparency.

Emami Infrastructure Ltd, the demerged realty arm of FMCG major Emami Ltd started trading on the national bourses on Wednesday and has already kicked up quite a storm in early trading hours.

The shares opened as high as Rs598.80 on the National Stock Exchange (NSE), only to come crashing down to Rs86.00 at the hour mark, translating into an astounding drop of 86%. The total traded volume stood at around 8.9 million shares on the NSE.

Meanwhile, on the Bombay Stock Exchange (BSE), Emami Infra opened at Rs250, hitting a high of Rs293 and then slipping to a low of Rs86. The total traded volume on the BSE stood at around 5.8 million shares. Finally, Emami Infra shares clsoed Wednesday at Rs101.7 on the BSE and at Rs103.7 on the NSE.

The wild fluctuations in the share price of Emami Infra and the gaping hole between the opening high price and day's low, within such a short span of time, raises a lot of suspicion. Certainly, a lot of manipulation is being carried out around this stock and begs some sort of regulatory intervention. The lack of transparency surrounding the company's listing and operations also raises a stink.

Most brokers were unaware of the situation and could not justify the wide price differential between the opening price at the two bourses or the wild gyrations in subsequent trading. Alok Churiwala, managing director, Churiwala Securities suggested that the only plausible explanation could be the time lag between the two stock exchanges. "NSE has a system of trading on co-located servers. It means that certain brokerages have their servers in the same facility as the NSE server. This enables them to trade within milliseconds, wherein hundreds and thousands of trades can take place. If one computer can do hundreds of trades in this time, imagine 10-15 computers doing it at the same time. By the time these prices reach the rest of the market, there could be a time lag. Possibly, by the time BSE could react to the prices, the ups and down would have already occurred at the NSE."

Commenting on the chances of price manipulation, Mr Churiwala said, "One can't infer that directly, but there could be some element of price manipulation. A movement like this is what gives rise to suspicion in minds of investors and is a fit vase for investigation."

Emami Infra is the outcome of a recent restructuring exercise by the parent company, Emami Ltd, wherein the group decided to bring its FMCG business under Emami Ltd and spin-off its realty business under a separate company.

Emami Realty, the erstwhile unlisted realty subsidiary of Emami, is now Emami Infrastructure. Zandu Pharmaceutical Works, which was renamed Zandu Realty following the restructuring, is now a listed real estate company and a subsidiary of Emami Infra.

The listing was done following shareholders' approval where one Emami Infrastructure share will be issued for every three Emami shares, while 14 Emami shares of Rs2 each will be issued for every one Zandu share of Rs100 apiece.

Related Stories:
SEBI investigating Emami Infra listing price anomaly
Emami Infra’s wild swings on listing day escape exchange surveillance

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COMMENTS

padmanabhan s

6 years ago

Zandu Zealty is stated to be subsidiary of
Emami Infra whereas the former 's FV
is still 100. What a fun the company is
making in the investing public? Is there
any need for a separate company in the
name of Zandu Realty whose value
is more than 3000 in the market!!!

amar

6 years ago

it shows how inefficient the indian markets are. what is sebi doing with its sophisticated market intelligence system?

Reliance General Insurance’s HealthWise Plan: It’s time to act

Reliance HealthWise has jacked up premiums by 500%. It’s time to act and send your complaints to IRDA.

We had reported earlier on the astronomical rise in Reliance HealthWise premiums. (See: http://www.moneylife.in/article/8/7498.html). Moneylife has received a number of reader responses on this article. 

Subsequently, we contacted a senior official at the Insurance Regulatory and Development Authority (IRDA). He was not aware of the incredible Reliance HealthWise premium increase (by 500%). The IRDA official has forwarded all the information to the Consumer Affairs Department and has promised to get back to us in a couple of days. According to industry sources, any increase in premium has to be supported by actuary data needed by IRDA for justifying approval. When we checked with the IRDA official about the same, Moneylife was told that the loading has to be specified by the insurance company in the product document that gets approved by IRDA. The official was going to check the Reliance HealthWise product document. We are requesting him to send us a copy of the same. 

Policyholders can approach the IRDA grievance cell:
http://www.irdaindia.org/grievance/contactinfo.htm. They don’t entertain third-party personnel to register complaints, and hence we are not in a position to forward any complaint. The toll-free number for the IRDA grievance call centre is 155255. Email to both [email protected] and [email protected]. The newspaper advertisement has the first email address while the webpage has the second email address. You can send a scanned copy of your Reliance HealthWise policy renewal showing old premium and new offered premium. If there is no claim made till date, please specify the same in your complaint. 

IRDA is carrying quarter-page advertisements in DNA and Economic Times urging policyholders to contact them with any problem with respect to insurance companies.

Reliance policyholders will have to register complaints with IRDA before they can expect any regulatory action against Reliance General Insurance. A Right to Information (RTI) query by a policyholder may help to know if Reliance General Insurance indeed has IRDA approval for 500% jump in premiums. 

Please register your complaint in writing with Reliance General Insurance too. Moneylife will certainly keep you updated and request you to keep us updated if you hear anything from Reliance General Insurance or IRDA.

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COMMENTS

MOHD IMRAN

6 years ago

Complain regarding insurance :Dear sir My maruti car insurance is reliance general insurance,My car have accident it is totally loss so I had applied for insurance in the month of 14 sep 2009 but till time I am fighting but no result……………..

My vehicle number is DL6CC7818 ,POLICY number is 1305792311015476
More than two year I am fighting but at last insurance reliance is saying we can not give insurance due to other person is driving ……car accident story as follows

My car have problemb so that I have given my car to mechanic ,he took my car but unfortunate he hit my car with a child so child was dead on the sport,so in the court case is running I have lost a car so I have applied for insurance.

But I am fighting more than two year but they have completed all formalities and at last they say we can not give insurance it is very shame and rediculious thing

Note :if you people will not give feed back I will go in the court

Car owner is my father car number is DL6CC7818 NAME MOHD SULEMAN
CLAIM REF NUMBER RELIANCE 2091247514
POLICY NUMBER 1305792311015476

Regards
Mohd imran
9818145354


nirmal bhauwala

6 years ago

155255 number not accesible.very strange irda not known about rising in premium.he is not work properly or they dont know there job or ek another scam,ghotala

alok sah

6 years ago

IRDA toll free n.o. 155255 is not accesible.
i have tried calling this number from my bsnl mobile a couple of times but i only get to hear that " dialled number does not exsist. please check the number and dial again "

WILL SOMEONE TELL ME HOW DO I GET ACCESS TO THIS TOLL FREE NUMBER.

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