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

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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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Gruh Finance FY14 net profit up 21.3% to Rs177 crore

During FY14, Gruh Finance posted a net profit of Rs177 crore, as its loan portfolio increased 29%

Gruh Finance, a subsidiary of Housing Development Finance Corporation (HDFC), reported 21% higher full year net profit on increased in revenues and growth in loan disbursements.
 

For the 12 month to end-March, the lender said its net profit rose 21.31% to Rs176.96 crore from Rs145.9 crore while its total revenues, including interest income grew 30% to Rs845.7 crore from Rs650.4 crore, same period last year.
 

Gruh Finance has declared a bonus share in 1:1 ratio to its existing shareholders. The company also declared a full year dividend of Rs3 per share.
 

Gruh Finance net interest margin during FY14 grew 24% to Rs270.66 from Rs217.75 crore in FY13. It made provisions of Rs30.82 crore for loan portfolio, Rs12.04 for contingencies and Rs7.60 crore on its non-performing asset (NPA) portfolio as per the guideline of National Housing Bank.
 

For the quarter to end-March, the lender reported a 16.7% higher net profit at Rs73.6 crore even as its total revenues, including interest income jumped 31% to Rs254.4 crore from Rs194.2 crore, a year ago period.
 

Gruh Finance’s housing loan portfolio as on 31 March 2014 stood at Rs7,009.04 crore an increase of 29% from Rs5,437.80 crore a year ago period. Its total loan disbursement increased 19% to Rs2,577.47 crore from Rs2,174.39 crore.
 

Its deposit portfolio in FY14 has grown to Rs1,002.88 crore, 54% higher than Rs649.95 crore a year ago period.
 

As on 31 March 2014, gross non performing asset (GNPA) of Gruh Finance stood at 0.27% (Rs18.87 crore) of the total loan outstanding of Rs7,009.04 crore as compared to 0.32% (Rs17.64 crore) as on 31 March 2013. Gruh Finance net NPA ratio is NIL.
 

Capital adequacy ratio (CAR) of Gruh Finance stood at 16.37% as on 31st March 2014.
 

Gruh Finance closed Friday 2.14% down at Rs312.50 on the BSE, while the 30-share benchmark Sensex ended the week flat at 22,628.
 

On 10th April, Gruh Finance hit its 52-week high at Rs325 on BSE.
 

For more stock results, check out this page
 

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