The shares of Integra Essentia Limited engaged in the business of trading Life Essentials like food, clothing, infrastructure, and many other factors went trending during the 2nd half of December 2023 due to its market presence and the company’s announcement to issue bonus shares of the company in the ratio of 1:1.
And on December 30, 2023, the record date(January 11, 2024) was finally fixed by the company’s board of directors, to determine the eligible shareholders of the company for the bonus issue. Following this, the equity shares of the company started to hit the upper circuit quite frequently thereby delivering a 120 percent return in just 13 trading sessions.
The shares of the company that made a name for itself and grew the investor’s money in no time are now trading at a discount of more than 50 percent from its 52-week-high thereby destroying the wealth of investors leaving no chance for them to take an exit, as the shares of the company were hitting its lower circuit price regularly dipping every day.
Here are some of the reasons or events that might have turned the shares of Integra Essentia from trading like a hero to suffering like a zero
The first event was the action taken by the Securities and Exchange Board of India, by placing the shares of Integra Essentia Limited under the Enhanced Surveillance Measure (ESM) stage 2 Category due to its sudden jump in share price.
Under ESM stage 2 the shares are placed in a trade-to-trade segment where the shares can be traded only from 9:30 A.M to 10:15 A.M with a 2 percent circuit band. This may have led to distrust or unfavorableness toward the investors as the shares won’t trade the entire day and they may not reap any benefits from it as it is under surveillance and something may be fishy.
The second event was the allotment of the company’s bonus shares, which increased the liquidity of the shares of the company trading in the market following which investors started to book their profits as soon as possible as the shares were hitting a 2 percent lower circuit every day.
The third event that may have fueled the share’s downfall was the declaration of its weak Quarter Ended December 2023 (Q3FY24) results, with a 1.65 percent growth in its revenue from Rs. 61.05 Crores in Q3FY23 to Rs. 62.06 Crores in Q3FY24 and a decline of 66.35 percent in its net profits from Rs. 2.11 Crore to Rs. 0.71 Crores.
The fourth and final event that may have broken the investor’s trust in the company was when Mr. Vishesh Gupta the managing director and the only promoter left in the company with a 20.81 percent holding stake, resigned from his position and left the company due to some personal reasons and other preoccupations as mentioned.
Usually, it is believed that the public shareholders and others feel safe investing in the company where promoters have more authority in the company by holding the majority stake, as they may have an interest and believe in the future prosperity of the company and would strive to take it to better heights.
The shares of Integra Essentia Limited are currently trading at Rs. 4.10 per share, after hitting a 5 percent lower circuit in the day’s trade.
These may have been the headwinds that might have affected the company shares and made it trade at a discount of more than 50 percent in less than 2 months.
Written by: Bharath K.S
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