Brightcom Group shares crash 18% in 4 sessions; analysts see more pain ahead

Shares of troubled Brightcom Group Ltd have cracked 18.45 per cent in four consecutive sessions. The stock came under immense selling pressure today after Brightcom chairman and Managing Director (CMD) Suresh Kumar Reddy, along with Chief Financial Officer (CFO) SL Narayana Raju, resigned with immediate effect following a Sebi order. For the unversed, the Securities and Exchange Board of India had restrained the company's top executives Reddy and Raju from holding any directorial positions.

In addition, central probe agency Enforcement Directorate (ED) said it has conducted searches under the provisions of FEMA, 1999, at five locations in Hyderabad and premises of company's auditor P Murali Mohana Rao. ED initiated its FEMA investigation on the basis of a search being conducted by the Sebi regarding impairment of assets worth Rs 868.30 crore by BGL through its subsidiaries abroad.

ED said various incriminating documents, digital devices, unaccounted cash of Rs 3.30 crore and gold jewellery and bullion worth Rs 9.30 crore from the residence of auditor Rao were recovered and seized during the search.

In terms of value, the counter saw extreme highs and lows this year. The stock today dived 4.96 per cent to hit a day low of Rs 19.72. At this price, the scrip has rebounded 112.72 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 56.99 per cent from its 52-week high of Rs 49.05, hit on August 23, 2022.

The stock, which was once considered multibagger, is backed by seasoned investor Shankar Sharma. It has zoomed 1,001.68 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 its order, also barred Sharma from selling shares in the company.

Technical analysts largely suggested that the 'bearish' trend on the counter may continue. It may see Rs 18 level, one of them said.

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 may touch the levels of Rs 18 in coming trading sessions."

AR Ramachandran from Tips2trades said, "Brightcom Group's stock price is looking bearish."

Kush Ghodasara, independent market expert, CMT, said, "One can exit the stock at current market price as indicators have confirmed bearish crossover."

VLA Ambala, research analyst at Stock Market Today, said, "The stock could experience some more dips in the near term."

Also watch: Reliance AGM 2023 Today: Reliance Industries, Jio Financial shares rise ahead of RIL AGM; Retail, Jio IPO listings to new energy plans, key announcement expected from Mukesh Ambani