Dynacons Technologies shot up by 433% between May 2014 and January 2016
Dynacons Technologies is, supposedly, a distribution, marketing and logistics company for IT industries and derives its revenue by selling IT products. In the quarter ended September 2015, it generated revenues of Rs7.70 crore, up 10% compared to the same quarter a year ago. But it reported a profit of just Rs0.04 crore in September 2015 compared to a profit of Rs0.03 crore in September 2014. Despite virtually no profits, the stock price shot up an astonishing 433%, from Rs2.97 on 30 May 2014 to Rs15.84 on 25 January 2016. In fact, much of the rally came in the second half of 2015. In just about three months, the price shot up by 117% from a low of Rs6.97 on 2 June 2015 to a peak of Rs15.15 on 14 August 2015. In October 2015, Arun Govil, who is on the board of US-based IT company—Centrex—acquired the promoter’s stake in Dynacons. It is surprising why the acquisition was made at such a high price. Strangely, in March 2015, when an open offer was made by Arun Govil, hardly anyone tendered their shares at an offer price of Rs1.30. Will the regulator investigate the strange dealing in Dynacons?
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The stock is way overpriced for sure, but at least there is some rationale for the same, unlike so many nondescript stocks that have been rigged to nonsensical levels in this bull run.