PC Jeweller share has degraded investor wealth substantially since January last year. The small cap stock which closed at all-time high of Rs 586.75 on January 17, 2018 fell to its all-time low of Rs 27 on BSE today. Investors in PC Jeweller have lost Rs 22,014 crore since January 17, 2018 when its market capitalization on BSE stood at Rs 23,138 crore.
Market capitalisation of the firm stood at Rs 1,120 crore on BSE today. Rs 1,00,000 invested in PC Jeweller on January 17 last year would have decreased to Rs 4,601 today. PC Jeweller share price has lost 70.48% during the last one year and fallen 67.09% since the beginning of this year.
The slide in PC Jeweller started on February 2 last year amid reports that shares of Vakrangee saw a sharp fall same day amid media reports that the firm was being probed by Sebi for possible stock manipulation. Vakrangee on January 25 purchased 20 lakh shares of PC Jeweller for a little over Rs 112 crore through an open market transaction.
Subsequently, PC Jeweller share price saw heavy selling pressure crashing nearly 60 per cent in intra-day trade but later recovered most of the lost ground after managements commentary that "the fundamentals of the company remain strong".
The stock of PC Jeweller tanked 24.40 per cent to end at Rs 365.60 on BSE. During the day, it plummeted 59.65 per cent to Rs 195.10.
The bulk deal data available with NSE showed that Vakrangee bought 20 lakh shares, amounting to 0.51 per cent stake in the jewellery major.
Vakrangee is a technology company based in Mumbai,that provides banking, insurance, e-governance, e-commerce, and logistics services.
The stock took a further hit after the company was mired in two issues.
First, there was speculation that the company's promoters might have held back information on a business relationship with e-governance service provider Vakrangee, a company, which according to reports came under Sebi's scanner for alleged price and volume manipulations of its own stock on BSE and NSE.
However, Vakrangee on February 3 clarified that rumours of involvement of company in price and volume manipulation were completely baseless and factually incorrect.
On January 25, 2018, Vakrangee bought 20 lakh shares of PC Jeweller at Rs 561.71 on NSE.
Secondly, according to reports, PC Jeweller promoter Padam Chand Gupta gifted some his stake to family members via off -market transactions. Even as the firm has said it would make requisite disclosures in this regard from time to time, there were fears about more such deals taking place in the future. It hit a fresh 52 week low of 110 level on May 2, 2018.
However, the stock saw some recovery on May 7, 2018 after PC Jeweller extended gains for the third straight session on strong value buying in the counter. The stock gained 92% in three sessions ahead of board meeting to be held on May 10 to consider the proposed buyback of fully paid-up equity shares of the company.
The PC Jeweller board announced a share buyback worth Rs 424 crore, at a price of Rs 350 per unit, 67 percent higher than the closing price of Rs 209 on previous day.
But the celebration on PC Jeweller counter did not last long as the firm on July 16 said it was withdrawing an offer related to buyback of equity shares. The stock crashed over 28% to Rs 86.10 compared to the previous close of Rs 119.95. It closed 25.89% or 31 points lower at 88.90 level on the BSE.
Since then the stock has been in downtrend barring few occasions. On April 15, 2019, PC Jeweller rallied over 16 per cent in intraday trade after foreign portfolio investors (FPIs) acquired more than 2 per cent stake in the company through open market transaction.
The share surged over 40 per cent in the previous four trading sessions after Carlina bought 0.37 crore equity shares, or 0.94 per cent stake, in the company at price of Rs 94.68 per share on the NSE on April 10. The FPI further extended its stake in the company by acquiring another 0.46 crore equity shares, representing 1.2 per cent stake, in PC Jeweller at a price of Rs 105.73 apiece.
The firm's financial performance in last fiscal failed to impress investors.
During the full 2018-19 fiscal, PC Jeweller posted a standalone net loss of Rs 2.81 crore as against a net profit of Rs 567.4 crore in the previous year.
Total income fell to Rs 8,461.17 crore during the 2018-19 fiscal from Rs 9,588.54 crore in the 2017-18 fiscal.
On a consolidated basis, the company posted a net loss of Rs 0.61 crore in the last fiscal year as against a profit of Rs 535.64 crore in the previous year. Total income fell to Rs 8,764.28 crore during the last fiscal year from Rs 9,707.13 crore in the 2017-18 financial year.
Edited by Aseem Thapliyal