Bombay Burmah shares hit fresh 52-week high; stock up 39% in a month; here's why

Shares of Bombay Burmah Trading Corporation Ltd (BBTC) rose sharply in Friday's trade to scale their one-year high levels. The stock jumped 14.98 per cent to hit a new 52-week high of Rs 2,168.95. It was last seen trading 11.49 per cent higher at Rs 2,103.10. At this price, the scrip has surged 38.74 per cent in the past one month and 104.89 per cent in a year.

The stock saw high trading volume today as around 1.13 lakh shares changed hands at the time of writing this story. The figure was higher than the two-week average volume of 36,000 shares. Turnover on the counter came at Rs 23.66 crore, commanding a market capitalisation (m-cap) of Rs 14,547.44 crore. There were 1,45,632 buy orders against sell orders of 12,438 shares.

Stock exchanges have recently sought clarification from the company over the sudden spike in share price. BBTC, in response, said, "We wish to inform you that all information required to be disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been duly disclosed by the Corporation from time to time. Further, there is no price-sensitive information concerning the Corporation which requires disclosure. As such, we do not know the reasons for increase in volume."

Recently, holding company stocks -- including Bombay Burmah -- have witnessed a sharp uptick after market regulator Sebi announced a framework for special call auctions with no price bands for price discovery of such firms.

The market watchdog noted in its circular that most of these firms are traded infrequently, and at a price significantly lower than the book value. Holding companies usually don't have operations of their own but they own investments in other listed entities, particularly within the same group.

"The variance in market price and book value of such holding companies is adversely affecting liquidity, fair price discovery and the overall interest of investors in scrips of such companies," Sebi underscored.

On technical setup, the counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 73.96. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a negative price-to-equity (P/E) ratio of 2238.40 against a price-to-book (P/B) value of (-)3.03. Earnings per share (EPS) stood at (-)0.84 with a return on equity of (-)3.03.

BBTC is a part of the Wadia Group conglomerate. The company has diversified its interests into tea, coffee, other plantation products, biscuit and dairy products, auto electric and white goods parts, weighing products, horticulture, landscaping services and healthcare products.

As of March 2024, promoters held a 74.05 per cent stake in the company.