Ashoka Buildcon slumps after reports of IT raids

Ashoka Buildcon was locked at 20% lower circuit at Rs 136 at 10:50 IST on BSE after reports the office of the company in Nashik was raided by the income tax department yesterday, 5 April 2016.

Meanwhile, the BSE Sensex was up 10.43 points, or 0.04%, to 24,890.13.

High volumes were witnessed on the counter. On BSE, so far 2.64 lakh shares were traded in the counter, compared with an average volume of 35,991 shares in the past one quarter. The stock was locked at a low of Rs 136 so far during the day, which is also a 52-week low for the stock. The stock hit a high of Rs 167 so far during the day. The stock hit a record high of Rs 211.90 on 23 December 2015. The stock had underperformed the market over the past one month till 5 April 2016, sliding 8.26% compared with 0.96% gains in the Sensex. The scrip had also underperformed the market in past one quarter, falling 10.58% as against Sensex's 2.72% fall.

The mid-cap company has an equity capital of Rs 93.57 crore. Face value per share is Rs 5.

As per reports, the raid on Ashoka Buildcon is being viewed in the backdrop of BJP MP Kirit Somaiya's visit to Nashik, Maharashtra on 25 March 2016, when he had alleged that Ashoka Buildcon had built the new bungalow of the Bhujbal family at Bhujbal farm in Nashik as a favour in return for contracts for roads and toll nakas. Ex-deputy chief minister Chhagan Bhujbal, was arrested recently in a money laundering case.

Somaiya was quoted by media as saying in Nashik last month that they have found entries for over Rs 40 crore from Ashoka Buildcon to the Bhujbal welfare fund, which goes to prove that the Bhujbals had taken favours from Ashoka Buildcon in return for road and toll contracts. He had also alleged that Ashoka Buildcon had built the Bhujbals' bungalow and that the Katariya family, a family of the company's founder had taken the Bhujbal family on a trip abroad. Ashok Katariya is a founder and Chairman of the company.

The raid took place in the office of Ashoka Buildcon, the house of the Katariyas and the Pimpalgaon-Baswant toll plaza run by the company. Vyom Shrivastav, the public relations officer of Ashoka Buildcon, reportedly said that the raid was part of an IT department inquiry and that the firm is co-operating fully with the authorities.

In a press release issued after Somaiya's visit to Nashik last month Ashoka Buildcon had clarified on 26 March 2016 that it has not contributed or financed any of the constructions of Bhujbal family including their bunglow at Nasik. It also clarified that it has not sponsored the trip of the then MP Sameer Bhujbal to watch and attend the FIFA World Cup in South Africa. Ashoka Buildcon always followed ethical practices in the business, it added.

On a consolidated basis, Ashoka Buildcon's net profit surged 935.9% to Rs 13.26 crore on 32.3% rise in net sales to Rs 602.10 crore in Q3 December 2015 over Q3 December 2014.

Ashoka Buildcon is a Nashik based highway concessionaire and engineering, procurement and construction (EPC) company.

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