What should you do? Infibeam loses Rs 9,200 crore in m-cap in just 1 day
Most experts suggest investors to stay away from Infibeam as the recent price action suggests that big hands from the stock might have exited.
Investors’ lost about Rs 9,200 crore in market capitalisation as Infibeam Avenues stock prices cracked 70% in a single session on Friday, the day before the company’s annual general meeting.
The reasons for the collapse could be attributed to the rumours which spread on WhatsApp may have triggered the slide. However, the management of the company clarified in a note that the fundamentals of the company remain intact and there is no information which is pending from the company's side.
Equirus Capital in a separate note said that they have only released a conference note and have not circulated any message on instant messaging platforms.
Infibeam Avenues Ltd, the operator of e-commerce firm Infibeam and the parent of payment gateway company CCAvenue, saw more than Rs 9,000 crore getting wiped out from its market capitalisation in a single day. The market capitalisation fell from Rs 13,105 crore recorded on Thursday to Rs 3,900 crore on Friday.
Most experts suggest investors to stay away from the counter as the recent price action suggests that big hands from the stock might have exited. If we look at the delivery data on the BSE it stood at 28,46,432, almost 4.8 times higher than from last Friday's slide (September 21) when the stock fell over 20 percent and recovered in the very next session.
Deliverable quantity data needs to be analysed along with the share price. When the share price of the stock is moving down with a higher percent of deliverable quantity to traded quantity, it indicates bearishness in the share as most sellers are expecting the share price to go down.
“The deliverable quantity of 28 lakh is very high and almost 4.8 times we saw on September 21 when the stock fell by over 21%. The data suggest that big hands might have exited from the stock and the recovery will take a very long time,” AK Prabhakar, Head of Research at IDBI Capital told Moneycontrol.
“If we look at the stocks which fell on Friday are mostly which have low quality. Investors should analyse stock in their portfolio and if 10,800 breaks mega-correction will follow. The stock appears expensive, and investors could look at exiting from the stock,” he said.
Reacting to the steep fall in stock price, the management of the company in a stock exchange filing clarified that they have provided timely information and clarifications as sought by the Stock Exchanges, and there is no pending information or announcement from the company which may have a bearing on the price behavior in the scrip
However, post market hours, Infibeam issued a stock exchange disclosure and confirmed that it had given interest-free unsecured loans to wholly-owned subsidiary NSI lnfinium Global Pvt. Ltd since inception.
“These loans are short-term loans which are repayable on demand and have been utilised by NS! solely for its business and operations,” the note added.
Technical Outlook:
On the technical charts, Infibeam is trading below its short-term moving averages such as 5-days exponential moving averages (EMA), 13-EMA, 20-EMA, and 100-EMA. But, on Friday, it breached the crucial 200-DMA placed at Rs 167 which suggests that the trend might have turned bearish for the stock.
Supertrend indicator as well as a trend-following momentum indicator, Moving Average Convergence Divergence (MACD), has given a sell signal on charts.
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
It is scary to see the value erosion of a scrip by around 50 percent in a single session which is highly unusual. I am afraid to say that this kind of huge value erosion in a single day will be usually followed by news flows of negative fundamental developments in the majority of the situations.
However, in the case of Infibeam we have seen this kind of highly speculative move on a couple of occasions even in the past, and later the stock stabilised and went on to make new swing highs.
For instance in 2017, twice in the month of March and on of September 25 and December 29 and on September 21, 2018 apart from the last session we saw big swings on the stock.
But, this time, the cut looks much deeper. Once we see this kind of wild swings, investors should stay away from speculative counters.
Analyst: Manav Chopra, CMT| Head Research- Equity, Indiabulls Ventures Ltd.
Infibeam had shown early signals of an exhaustion setup which was witnessed by a sharp decline. The stock not only breached all support zone but has also hammered the overall structure and is unlikely to recover in the near future. Would recommend traders and investor to avoid any entry into this.
Source: https://www.moneycontrol.com/news/business/wire-news/uk-india-fashion-designers-to-boost-ne-women-textile-workers-2998851.html
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