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Shree Ashtavinayak shows what’s wrong with Indian market

The stock price of loss-making Shree Ashtavinayak has shot up 128% in just eight trading days. The promoters hold just 0.54% and so-called FIIs 7.93%. Is SEBI aware of the obvious manipulation and possible money laundering?


On 31 March 2014, the shares of Shree Ashtavinayak Cine Vision Ltd, (Shree Ashtavinayak) hit a 52-week low at Rs0.46. After this, it started moving up ferociously and in just eight trading days the stock has gained 128% to Rs1.05 on 11th April on the BSE. Trading volumes have exploded. On 31st March, the volume of shares traded was 2.93 lakh shares, which kept on increasing and on 10th March, volumes grew more than 10 times to 33.86 lakh.
 

What's driving the stock price? Or, is it another blatant case of price manipulation, that market regulator Securities and Exchange Board of India (SEBI) cannot see?


 

Prices and Volume Data of Shree Ashtavinayak
 

Date

Open  Price

 

High  Price

Low  Price

Close  Price

Rise in % (CP - OP)

No. of Shares

31-Mar

0.48

0.49

0.46

0.47

-2.08%

2,93,337

01-Apr

0.47

0.49

0.47

0.48

2.12%

2,96,426

02-Apr

0.48

0.55

0.47

0.54

12.5%

8,46,365

03-Apr

0.55

0.64

0.53

0.64

16.36%

20,42,284

04-Apr

0.66

0.76

0.66

0.76

15.15%

25,48,935

07-Apr

0.83

0.83

0.78

0.83

0%

14,92,161

09-Apr

0.91

0.91

0.85

0.91

0%

35,86,180

10-Apr

0.95

1.00

0.92

1.00

5.26%

36,94,619

11-Apr

1.04

1.05

1.01

1.03

-0.96%

33,86,158

 

The company is making large losses. During December 2013 quarter, Shree Ashtavinayak recorded net loss of Rs4.27 crore compared with Rs3.26 crore of loss a year ago. In the September 2013 quarter, it recorded a humongous Rs43.19 crore of loss. The promoter stake in the company is negligible at 0.54%. Guess what? So-called foreign institutional investors (FII) hold 7.93% in this penny stock, leaving 91.53% with the public, as on 31st December 2013. Is this some kind of joke?

 

According to market sources Shree Ashtavinayak has always been seen as an 'operator-driven' stock. The share prices of this film production company has always been driven up and down on rumours and unconnected to its fundamentals.
 

Moneylife earlier wrote on Shree Ashtavinayak shares being rigged up again describing about sudden price manipulation in the scrip.  On 14 January 2011, the stock price closed at Rs5.36. This was the first upward move since 25 November 2010. And in the six trading sessions since 14th January, the stock gained 33% to Rs7.15. This is in sharp contrast to the 90% fall in two months till 14 January 2011.
 

In February 2010, the stock price slipped from Rs33 and was locked in the lower circuit for days, till it settled at Rs11 on 11th March. It languished at Rs11-15 levels between March and July last year, then started to move upwards, apparently on rumours that the company would earn a bumper profit from the distribution of 3 Idiots.
 

This is one stock that reflects all that is wrong with stock market supervision.
 

  • Operators can rig stock prices at will in India. There is no investigation
  • The FII route has long been suspected of money laundering and round-tripping. This case almost proves it. Why would “FIIs” be holding 7.93% shares in a penny stock, where “promoters” hold just 0.54%?
  • The market regulator SEBI is getting more powers and money to act like the police – search, seize, detain, freeze assets etc but has been found to be failing to monitor obvious cases of price manipulation.
  • SEBI has blown up over Rs40 crore in installing Intermarket Surveillance System under successive chairmen from M Damodaran to Mr UK Sinha but can be bothered by such obvious cases of price rigging.
     

In every issue of Moneylife magazine we feature a story of price manipulation under the label UNQUOTED. We have highlighted many preposterous and blatant cases of price rigging but Sebi does not give a damn.
 

Read more stories on Shree Ashtavinayak Cine Vision,
 

 Shree Ashtavinayak shares being rigged up again
 

Exchanges, market regulator sleep as operators rig Shree Ashtavinayak shares with impunity

User

COMMENTS

Sanjeev

3 years ago

As i heard there was a deal between operator( price manipulator )and T.A. Shah (have given Secured loan )to Ashtavinayak

Suiketu Shah

3 years ago

This stock reminds me a "high risk high return share" suggested by Amit Kapadia director of HDFC Bank in 2011 called allied Digital which is now at 15 rs compared to 2011 at 32.In 2009 it was rs 250/-.The stock broker makes a killing at the cost of the hapless investor who suffers high loss in such punter shares.

Abhijit Gosavi

3 years ago

If this isn't stopped, who will invest in the stock market? The good and bad money must not be allowed to mix.

A frog's heart has three cavities (unlike the human heart which has four) that causes the blood from the arteries and veins to mix --- which is why it's a frog.

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