Exchanges, market regulator sleep as operators rig Shree Ashtavinayak shares with impunity
Alekh Angre 07 December 2010

The stock has hit the lower circuit for eight days in a row. Market players blame operators close to promoter circles

It has hits like Dabangg and Golmaal 3 under its belt and it is planning a few more blockbusters. Yet, the stock price of Shree Ashtavinayak Cine Vision (SACVL), this successful movie producer, is crashing. The stock price has plunged from around Rs 50 on 5th November to Rs18.50 today. And what a crash it has been.

Since 25th November, on every single day of the last eight trading days, the stock has been locked in the lower circuit. This kind of crash happens when a company is in dire straits. We asked around but nobody had heard of any kind of trouble for the company. What then is the issue?

SACVL has been what is called an "operator-driven" stock. This means that a bunch of big players with the help of people close to the promoters effortlessly rig the prices up and down as they please, even as the stock exchanges and the market regulator

Consider this. The stock price of SACVL on 5th November touched Rs51.20 and closed at an all-time high of Rs49.65 on that day, the highest level since the previous peak in February 2010. Over the next fortnight the price slipped to Rs43.50 on November 24, then moved up again to Rs45.75 on 25th November, from which level it has been falling continuously.

There appears to have been a similar pattern in February this year, when the stock price reached around Rs33. There was a similar crash and the stock was locked in the lower circuit for days on end until it touched a low of Rs10.65 in intraday trading on 11th March.

Clearly, it's useless to correlate the stock with the company's business. Dabangg set a record by grossing around Rs 80 crore in the first week, making it the highest grossing Bollywood film in 2010. The film also did remarkable business overseas. Its  next production, Run Bhola Run, is expected to be released in February 2011.

However, investors seeking to buy the stock on the basis of the performance of these film productions could well burn their fingers. "It is a stock consistently rigged by operators," said an official with a top equity trading firm, who requested anonymity.

Comments
Shiva Krishnan
1 decade ago
Thank you for updating me by sending instant mails.Such updates really helped me to tackle questions in Interview.
pinakin
1 decade ago
Past examples of similar scrips prompts one to consider buying such a scrip (eight lower circuits in a row!!) at these beaten down levels...albeit with the clear understanding that this is a high-risk-high-gain speculative bet...because, the operators who have slammed the stock so severely are also capable of jacking it up some day. The next hit on the box office from the company & the upper circuits may start!!
nagesh kini
1 decade ago
who'll shake the regulator out of the slumber?
a case of good rules in place no one to enforce them!
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