In­tel­lect De­sign Falls 12% Af­ter Jhun­jhun­walas Sell a Chunk

The Economic Times - - Smart -

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

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