Gift to family helps wipe $2.6 bn off PC Jeweller value

MUMBAI: An Indian jeweller that saw its market worth reach $3.6 billion at the start of the year is now floundering at about a quarter of that value after one of its founders gifted some shares to family members, raising concern about the company’s governance.

PC Jeweller Ltd slumped about 40% in the past week after the company said that one of its founders, P C Gupta, made the gifts in off-market trades.

While the shares rebounded 44% on Friday, they’re still down 70% from the January 19 record and the company’s market value has shrunk to ₹6,890 crore ($1 billion).

“Investors are concerned about the quality and timeliness of the company’s disclosures,” said Devansh Lakhani, director at investment advisory firm Lakhani Financial Services Ltd.

There was speculation that family members may be selling shares in the open market though recent management comments have assuaged some of those concerns, he said.

The claims were baseless and the founders were “very much invested in the company as they still hold 58% stake,” PC Jeweller chief financial officer Sanjeev Bhatia said in an interview.

“We have done everything and said everything. There is nothing extra that I could say about this.”

In response to questions from investors, the company said in the April 25 filing that it wasn’t aware of a reason for the sudden plunge that day in the stock.

It denied that any founders had sold shares on the market, but revealed Gupta had made the gift of an undisclosed number to “his family member(s)”.

The company added that it makes timely disclosures and its fundamentals remain strong.