Firms may appeal new categorisation

A few companies whose scrips are to be shifted by the Bombay Stock Exchange (BSE) to the trade-to-trade segment from Friday are planning to approach either the Securities and Exchange Board of India (Sebi) or BSE authorities, or move court against the exchange's decision.

The BSE yesterday said it was shifting nine scrips to the trade-to-trade segment.

These include Aftek Infosys, SSI, Silverline Technologies, Pentamedia Graphics and Himachal Futuristics Communication Ltd.

In the trade-to-trade segment, each trade, whether purchase or sale, has to be backed by delivery, curtailing speculative trading in the stocks. Recently, the exchange cautioned investors about trading in illiquid scrips.

L K Desai, chief investor relations officer at GTL, said, "We will be taking a view on the matter and are keen to know the reason behind the move. We will then decide on the future course of action."

Senior executives at Himachal Futuristics also indicated that they would decide on their course of action.

SSI Chairman Kalpathi S Suresh said, "We are definitely surprised by the BSE action. We have no information about the basis of taking this action. We would have been happy to address any issue that has made the exchange take this decision. We would have been glad if the exchange had spoken to us first."

"We are going to review the situation and plan a course of action tomorrow. We are trying to understand the how and why, before contemplating any action," Suresh said.

BSE sources said the decision to move these scrips to the trade-to-trade segment had nothing to do with the corporate conduct of these companies.

"The trigger was market volatility. It is a pre-emptive move adopted in consultation with Sebi for investors' safety," a source said.

A BSE release said the reason for their transfer was the sudden spurt in volumes in these scrips.

"It has been observed that there has been a recent spurt in the volumes of certain scrips. With a view to take preventive surveillance measures to ensure market safety and integrity, and pursuant to the meeting with Sebi, to safeguard the interest of the investors, it has been decided that these scrips be shifted for trading and settlement on a trade-to-trade basis from September 26," the release said.

Most of the affected stocks suffered in the markets today. The Aftek Infosys scrip price lost 19.40 per cent to close at Rs 283.40.

The Pentamedia Graphics scrip price fell 16.54 per cent to Rs 7.82, Global Trust Bank 12.20 per cent to Rs 20.15 and Silverline Technologies 10.29 per cent to Rs 5.49.

Second-line pharmaceutical major Kopran lost 9.98 per cent to close at Rs 60.40, GTL 10.67 per cent at Rs 65.30 and Lupin 7.75 per cent at Rs 437.45. Himachal Futuristics fell 19.85 per cent to close at Rs 22.