Block deal: What Clean Science says on Spark's punching error as stock stages recovery

Clean Science and Technology Ltd, which saw heavy turnover on Thursday, told stock exchanges that a ‘punching error’ by a broker appointed by its promoters led to unusually large trades, as the stock staged a sharp recovery by close. Broker Spark Institutional Equities, while executing the promoters’ block deal, mistakenly sold a much larger number of shares than what had been authorised and instructed, Clean science said.

Krishnakumar Ramnarayan Boob & family, along with Ashok Ramnarayan Boob & family, had planned to sell up to 24 per cent stake or about 2.5 crore shares via blocks today, which as per the floor price of Rs 1,030 per share, amounted to Rs 2,626 crore.  Instead, over six crore shares changed hands in blocks. 

In a clarification sought by stock exchanges, Clean Science confirmed that promoters had sought to sell up to 24 per cent of the total shareholding. Spark Institutional Equities and JP Morgan were said to be the joint brokers for the transaction.

"SIEPL has informed the sellers that on account of an error at SIEPL’s end, the sell orders were for a significantly higher number of shares than what SIEPL was authorised and instructed to sell for and on behalf of the sellers. We have been given to understand that SIEPL has/is taking immediate remedial steps to review the situation and address the matter responsibly," Clean Science said. 

The stock witnessed high turnovers of Rs 7,073.85 crore on BSE and Rs 3,440 crore, due to punching error and the broker's remedial steps. 

Clean Science and Technology shares eventually closed at Rs 1,148.55, down 2.76 per cent. The company commanded a market capitalisation of Rs 12,205.33 crore.

"The sellers are awaiting a detailed explanation from SIEPL of the reasons and the remedial steps taken by it," Clean Science said. 

The promoter group holds 74.9 per cent in Clean Science. During its July earnings call, The management had already flagged the possibility of a minority stake dilution to facilitate family estate planning.

Punching errors are rare.  On October 5, 2012, a dealer at Emkay Global, acting on behalf of Templeton Mutual Fund, mistakenly punched an oversized sell order. Instead of placing a sell order worth Rs 17 lakh on a Nifty basket, the dealer entered an order to sell 17 lakh shares of the 50 Nifty stocks, amounting to Rs 974 crore. Of this, trades worth Rs 660 crore were executed.