Orbit tanks 18% on buzz of pledged shares selling

Orbit has its share of worries as Mumbai property market is passing through a slowdown for the last many quarters

The stock of Mumbai-based real estate developer Orbit Corporation on Monday fell 18.3 per cent on buzz a lender to the company had sold a portion of pledged shares.

According to filings with the stock exchanges, Emgee Foils Private, a promoter group company, had invoked 50,000 pledged shares on May 13, and sold those in the open market. Those had a value of Rs 10.59 lakh. About 86.98 per cent of promoter stake was pledged with the lenders.

"Real estate companies, with high promoter shareholding, are always prone to challenging times," said a head of a Mumbai-based stock brokerage firm who did not want to be quoted. The company promoters could not be reached for comments.

Orbit has its share of worries as the Mumbai property market is seeing a slowdown for the last many quarters. Its stock price has fallen 72 per cent since the beginning of the year, eroding the market capitalisation.

Orbit Corporation has reported a net loss of Rs 10.53 crore for the fourth quarter ended March 31, 2012 as compared to a net profit of Rs 4.2 crore in the same period of previous fiscal.

HDIL, another Mumbai based company also saw its stock crashing 40 per cent between Janaury 21 to 24 after the company vice chairman sold one per cent stake in the company for Rs 54 crore to meet deadline for some land payments. Around 96.11 per cent of HDIL promoter stake was pledged with lenders.

Orbit stock which opened at Rs 19.5, touched intra-day high of Rs 15.50 before closing the day at Rs 15.8.