Valecha Engineering lost 7.48% to Rs 44.50 at 12:05 IST on BSE, with the stock extending yesterday's slide triggered by the market regulator restraining 14 entities from raising fresh capital.
Meanwhile, the BSE Sensex was down 470.92 points, or 1.85%, to 24,935.41
On BSE, so far 61,618 shares were traded in the counter, compared with an average volume of 75,641 shares in the past one quarter. The stock hit a high of Rs 46 and a low of Rs 44.35 so far during the day. The stock hit a 52-week high of Rs 130.80 on 3 February 2015. The stock hit a 52-week low of Rs 41 on 7 September 2015. The stock had underperformed the market over the past one month till 6 January 2016, falling 15.17% compared with 0.90% decline in the Sensex. The stock, however, outperformed the market in past one quarter, gaining 1.8% as against Sensex's 5.67% fall.
The small-cap company has an equity capital of Rs 22.53 crore. Face value per share is Rs 10.
Securities & Exchange Board of India (Sebi) in its order dated 5 January 2016 said that Valecha Engineering and its promoters violated provisions of the Prohibition of Fraudulent and Unfair Trade Practices regulations. The order shall come into force with immediate effect, Sebi said. Shares of Valecha Engineering had dropped 10.18% to settle at Rs 48.10 yesterday, 6 January 2016. The stock has declined 16.9% in two trading days from the recent high of Rs 53.55 on 5 January 2016 after the Sebi order.
Meanwhile, Valecha Engineering after market hours yesterday, 6 January 2016 said that the management has taken note of the order passed by Sebi on 5 January 2016 from the Sebi website. On receipt of formal order, the company will consult the legal council and firm up a future course of action in this regard, Valecha Engineering said.
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The market regulator had conducted investigation into the trading in the scrip of Valecha Engineering for the period 1 January 2009 to 31 December 2009. On 19 October 2005, Valecha Engineering had made preferential allotment of convertible warrants at the rate of Rs 199.55 per warrant/share to five entities.
Sebi found that prior to and also after the preferential allotment, substantial funds were transferred from Valecha Engineering to the 'preferential allottees' through several 'connected entities' (who were noted to be inter se connected amongst themselves on the basis of inter se fund transfers, common directors, etc. and also with Valecha Engineering, preferential allottees on the basis fund transfer, shareholding, promoter, etc.) and then back to the company. Later during 2009, substantial non- genuine trading in the scrip amongst the said 'connected entities,' 'preferential allottees' and the certain other entities connected/ related to Valecha Engineering and its managing director, Jagdish Valecha was observed, Sebi said.
Accordingly, Sebi, inter-alia, restrained the 14 entities from raising capital from public and further prohibited them from buying, selling or otherwise dealing in securities, directly or indirectly, in any manner, whatsoever. The 14 entities included Valecha Engineering, Jagdish K. Valecha, F2Fun & Fitness (I), Loop Engineering Consultants, Core Real Estate, Brightword Consultancy, Valecha Investment, Occasion Impex, Worth Buying Trading, Admire Consultants, Windmill Exports, Nirjhari Desai, Reena Valecha, Padma Valecha
Sebi directed that the shares of Valecha Engineering allotted pursuant to the preferential allotment dated 19 October 2005 and lying in the demat accounts of the preferential allottees shall remain frozen. Sebi also directed the company not to give effect to transfer of any shares acquired and held by the preferential allottees in the preferential allotment dated 19 October 2005 and restrained the preferential allottees from exercising any voting rights (including through nominee or proxy) or other rights attached to the shares acquired and held by them in the preferential allotment dated 19 October 2005.
Valecha Engineering reported net loss of Rs 40.18 crore in Q2 September 2015, higher than net loss of Rs 4.58 crore in Q2 September 2014. Net sales rose 21.3% to Rs 163.82 crore in Q2 September 2015 over Q2 September 2014.
Valecha Engineering is engaged in the construction of infrastructure & engineering projects such as roads, highways & expressways, bridges & tunnels, airports, irrigation dams, reservoirs & canals, railways foundation & piling works.
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