Intellect Design Falls 12% After Jhunjhunwalas Sell a Chunk
Mumbai: Shares of Intellect Design Arena fell up to 12% on Wednesday to touch a 52-week low after investor Rakesh Jhunjhunwala and his wife Rekha sold more than 42 lakh shares in the company through bulk deals. The stock of the company has fallen by 43.5% in the last year but some analysts feel downside is limited.
HDFC Securities has reiterated its positive stance on the stock despite the recentbulksalebyJhunjhunwala.The stock saw a ten-fold increase in its total traded quantity on Wednesday at 12.52 lakh shares, compared to a two-week average quantity 1.91 lakh shares. “The exit of a big investor is a matter of interest for many. However, the sharp correction can also be viewed as an opportunity for others to buy,” said Apurva Prasad, re s e arch analyst, HDFC Securities. The stock closed 9.5% lower at ₹ 111.30 on Wednesday. Analysts said the stock could fall by another 10% to ₹ 100 in the coming week.
For the December quarter, the company reported a net loss of ₹ 21.59 crore compared to a net profit of ₹ 2.25 crore in the corresponding quarter last year.
“There have been some negatives for the company in terms of deal deferrals and a slowdown in new deal wins, but we believe these headwinds have been priced in currently,” said Prasad. Compared to global peers, the valuations are at a discount, he said.
The company has filed for a rights issue with Sebi for up to ₹ 200 crore, said analysts. As per BSE data, Rakesh Jhunjhunwala held 1.24% stake in the company as on December 2016, while Reliance Mutual Fund held 6.8%. Intellect Design had earlier demerged from Polaris Consulting, which continues to hold 24% stake.
The company has filed for a rights issue with Sebi for up to 200 crore, said analysts