Dhoot Industries shot up by 697% between May 2015 and January 2016
The main business of Dhoot Industries is financing—loans and project finance—according to its annual report for FY14-15. Strangely, on the company’s website (dhootindustries.net), it is mentioned that it deals in real estate development and granite trading. Not surprisingly, there is no mention of the projects financed, or any details of trading activities— neither in the annual report nor on its website. For the year ended 30 September 2015, it reported revenue of just Rs40 lakh and a net profit of Rs5 lakh. Revenues were Rs39 lakh—the same as in the same period in the previous year; net profit was Nil. The company’s business may be skeletal but the stock price shot up an astonishing 697%, to Rs9.17 on 6 January 2016, from Rs1.15 on 4 May 2015. Strangely, institutional shareholders, such as PNB Capital Services, Central Bank of India and UCO Bank together hold a stake of about 7%.
Trading was infrequent and trading volumes were low in the months prior to May 2015 compared to the six-month period ended 31 December 2015. Only one or two trades were conducted each day over this six-month period. The average trading turnover was just Rs3,400 over the same period. Huge gains were posted as the stock was up nearly 1.50%-2% in each trading session. In November 2007, Dhoot Industries was suspended by the BSE for not complying with the listing agreement. Will the regulator investigate this brazen price-rigging?