Gitanjali Gems slips as foreign fund offloads almost entire stake

Gitanjali Gems lost 2.5% at Rs 56.50 at 14:31 IST on BSE, after a foreign fund sold 2.15% stake in the jewellery firm in a bulk deal on Wednesday, 25 September 2013.

Meanwhile, the S&P BSE Sensex was up 99.23 points or 0.5% at 19,955.47

On BSE, 2.19 lakh shares were traded in the counter as against average daily volume of 3.01 lakh shares in the past one quarter.

The stock hit a high of Rs 59.20 and low of Rs 56.20 so far during the day. The stock had hit a 52-week low of Rs 56.50 on 12 August 2013. The stock had hit a record high of Rs 649.50 on 23 April 2013.

The stock had underperformed the market over the past one month till 25 September 2013, falling 20.66% compared with the Sensex's 7.22% gain. The scrip also underperformed the market in past one quarter, declining 82.12% as against Sensex's 6.59% rise.

The small-cap company has equity capital of Rs 92.06 crore. Face value per share is Rs 10.

Foreign fund Credit Suisse (Singapore) sold 19.75 lakh shares or 2.15% stake of Gitanjali Gems (GGL) at Rs 60.10 per share on NSE on Wednesday, 25 September 2013. The shares were bought by Venus Capital Management Inc. Credit Suisse (Singapore) owned 19.96 lakh shares or 2.17% stake in GGL as on 30 June 2013.

Shares of GGL were on a sustained downtrend recently, sliding a whopping 89.12% in 37 trading sessions to Rs 59.45 on 8 August 2013 from a high of Rs 546.50 on 18 June 2013. Thereafter, the stock saw alternate bouts of rise and fall.

Credit rating agency CARE had on 5 July 2013, revised the ratings assigned to the bank facilities/instruments of GGL and its subsidiaries/step-down subsidiaries and placed them on credit watch. The revision in the ratings takes into account stressed liquidity position of GGL as evidenced by full utilisation of the existing working capital limits which along with the recent RBI guidelines on gold import for domestic purpose would further put pressure on its liquidity position, CARE said. CARE further added that it has also taken into account the significant erosion in share price and market capitalisation of the company in the last two weeks of June 2013 which in CARE's opinion would have weakening effect on GGL's financial flexibility and liquidity. The rating has been placed on credit watch due to lack of adequate information in-order to take a final view, the rating agency added.

GGL's consolidated net profit dropped 76.4% to Rs 35.13 crore on 15.8% increase in net sales to Rs 3919.18 crore in Q1 June 2013 over Q1 June 2012.

GGL is an integrated gems and jewellery (G&J) player with operations spanning across the entire G&J value chain. The company's business encompasses activities like rough diamond sourcing, cutting, polishing and distribution, jewellery manufacturing, jewellery branding and retailing.

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