No Exit from the Stock That Rose 16,000%
Mumbai: Many investors are finding it difficult to exit from the little-known Ahmedabad-based paper company Kushal Tradelink, which has been the best performing stock in the last three years. Kushal shares have been hitting the 2% lower circuit since January 25 after BSE put it in the trade-to-trade category for unusual trading. The stock has produced eye-popping retur ns of 16,000% since August 2013.
The market capitalisation of Kushal, whichstoodat ₹ 45croreonAugust8,2013, rose to ₹ 7,231 crore as on January 24 this year. The stock surge went relatively unnoticed among the wider sections of investors as the company is not tracked by analysts at brokerages.
The company posted consolidated net sales of ₹ 1,589 crore in 2015-16 as against ₹ 433 crore in 2014-15. In 2013-14, net sales were ₹ 302.5 crore. Net profit soared 1,420% to ₹ 98.9 crore in 2015-16 compared with ₹ 6.5 crore the previous year. The sales and profit growth, however, did little to trigger analysts’ curiosity in the companyamidchatterthatafewGujarat and Mumbai-based operators were in-
volved in the stock’s dizzy ascent.
Market watchers said these operators indulged in circular trading to push up the share price.
“Thestockwascomplete satta,” said SP Tulsian, an independent equity advisor. “There is nothing financially to justify the rally. Before January 24, there were buyers for several lakhs of shares, now selling 100 is difficult. This bares it all.”
The market is agog with speculation that many high-net-worth individuals were lured into buying the stock on the promise of 2% monthly interest against assured investment sum in the stock.