Brightcom Group shares crack 5% after Sebi order; bearish trend may continue, analysts say

Shares of Brightcom Group Ltd fell sharply in Wednesday's trade following the Securities and Exchange Board of India's (Sebi's) order. The stock slipped 4.96 per cent to hit its lower circuit of Rs 22.98. The counter saw extreme highs and lows this year. At today's low price of Rs 22.98, Brightcom has rebounded 147.89 per cent from its one-year low of Rs 9.27, a level seen on April 28 this year when it turned into a penny stock. That said, it has lost 53.15 per cent from its 52-week high of Rs 49.05, hit on August 23, 2022.

The multibagger stock, backed by seasoned investor Shankar Sharma, has yet zoomed 1,066.50 per cent in the past five years. As of June 2023, Sharma owns a 1.14 per cent stake in the company, slightly lower from 1.24 per cent held in the previous quarter.

Market regulator Sebi, in an interim order, restrained the company's top executives Suresh Kumar Reddy and Narayan Raju from holding any directorial positions until further notice. Reddy is the promoter-cum-chairman and managing director of Brightcom Group and Raju is the chief financial officer. Sebi also restrained ace investor Sharma from selling shares in the company. In total, a total of 25 entities and individuals would be hit by the Sebi order.

Brightcom, in response, said, "Upon receipt of the (Sebi) order, we immediately set up a dedicated internal team to thoroughly review the details and implications. The company is evaluating potential action courses to address this situation effectively. We are in consultation with legal experts to ensure that all our responses are in the company's and its shareholders' best interest."

Sebi also said, "We've repeatedly tried to obtain information and supporting documents from Sharma regarding payments made by him to BGL in respect of the warrants/shares allotted. However, he is yet to provide complete information and documents."

Sharma took to X (formerly Twitter) and wrote, "We have submitted all required reconciled remittance data to Sebi today, totalling to Rs.56.65 crore for 1.5 crore shares @ 37.7 RS= 56.65 crore. Delay was because of bank reconciliation data pending from the company. We look forward to early closure of the matter."

Sebi also raised questions over the financial statements prepared by the company and various disclosures made by it on stock exchanges or in annual reports in the past.

This is not the first time when the company came under the Sebi scanner. Before this, the market regulator had issued a showcause notice to the ad-tech firm. It also flagged concerns and made observations about the irregular and incorrect filing of shareholding pattern of the company.

Technical analysts largely suggested that the 'bearish' trend on the counter may continue in the near-term.

Market expert Ravi Singh said, "Brightcom Group shares are on selling spree after Sebi found lapses in the company's preferential issue of shares. The selling pressure may continue when the freeze opens. The stock of BGL may touch the levels of Rs 18 in coming trading sessions."

AR Ramachandran from Tips2trades said, "Brightcom Group's stock price is looking bearish. It may see Rs 20 level in the near term."

Kush Ghodasara, independent market expert, CMT, said, "One can exit the stock at current market price as indicators have confirmed bearish crossover which means we are probably see a dip towards Rs 20, at least."

VLA Ambala, research analyst at Stock Market Today, said, "The stock could experience some more dips in the near term. One can book profit if the price touches Rs 21.50. Fresh buying position could be initiated above Rs 25.60. Those who are already invested with a long-term view must consider Rs 21.50 as its strict exit level."

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