Amtek Auto sinks 35% on another bout of selling

There was no respite for the Amtek Auto stock on the bourses on Thursday. Selling by foreign portfolio investors Barclays (12.16 lakh shares) and Swiss Finance Corp (27.39 lakh shares) knocked almost another 35 per cent off the stock price.

No circuit filter As the stock is trading in the derivative segment, the stock does not attract circuit filter. That means the stock could fall or rise beyond 20 per cent.

From ₹176.1 to ₹30.1 The Amtek Auto scrip had traded at an intra-day high of ₹176.1 on the BSE on August 3, closing that day at ₹170.95. A month later it recorded an intra-day low of ₹30.1 — down 83 per cent. It closed the day at ₹31.55 apiece.

Amtek Auto has seen a downward spiral ever since rating agency CARE suspended ratings on the company on August 7.

Weak numbers add fuel As if this was not enough, the company announced losses to the tune of ₹157.6 crore for the first quarter of the current financial year. Interestingly, the announcement was made after market hours on August 14.

The company had recorded a net profit of ₹86 crore for the first quarter of the previous year.

The moment markets opened for trading on August 17 the stock lost another 11 per cent. This time it was said to be the market’s reaction to Amtek Auto’s weak numbers and fears surrounding the company’s ability to service debt.

When the NSE excluded it from the F&O segment on August 19, effective November 2015, the scrip tanked 39 per cent (as on date F&O contracts in the scrip are available only until October). On August 21, the scrip recovered a tad on news of a promoter infusing funds worth ₹75 crore.

However, a rating revision of its NCDs by Brickwork India was announced on August 27 (to ‘C’ from A+) and the scrip hasn’t recovered from the shock since then.

Arun Kejriwal, Founder, KRIS Research, said “First it was exclusion from F&O, then it was pledged shares, and certainly there is likely to be a new reason on Monday, if not tomorrow.”

Technical view A technical analyst requesting anonymity said the scrip is likely to consolidate between ₹20 and ₹30 levels and this would go on for about five to six months. In case there is a vertical rise on hugely positive news, it would still remain capped between the levels of ₹50 and 60 though such an occurrence was highly unlikely he felt.