Gini Silk Mills shot up by 951% from March 2015 to March 2016. Is the regulator's high-cost surveillance system effective?
Gini Silk Mills manufactures woven and printed fabrics. With its manufacturing facility located at Tarapur (Maharashtra), Gini Silk Mills states on its website that it supplies fabric to Wills Lifestyle, Westside, Peter England, Indigo Nation and Shoppers Stop. However, there is no mention of its clients in the company’s annual report for 2014-15. The textiles manufacturer reported revenue of Rs41.02 crore and a profit of Rs2.86 crore for the year ended December 2015. For the previous year, the revenue reported was almost the same, at Rs41.38 crore, and profit was slightly lower, at Rs2.24 crore. With no significant growth in sales or profits, the stock price of Gini Silk Mills shot up an astonishing 951%, or nearly 11 times, over the past one year. From a low of Rs29 on 23 March 2015, the stock shot up to Rs305 on 31 March 2016, with an average of just 40 trades a day.
As on 31 December 2015, Gini Silk Mills had 614 shareholders holding 25% stake in the company. The number of shareholders has reduced from around 800 in December 2013. Is this another pump & dump operation? Will the regulator investigate?