Man Industries shares sink 16% on Sebi ban; says financial impact minimal

Man Industries shares fell 16 per cent after Sebi banned its chairman and top executives from accessing the securities markets for two years

Shares of Man Industries Ltd. tumbled over 16 per cent on Tuesday after the securities markets regulator banned its chairman and top executives from accessing the securities markets for two years over alleged fund diversion. 

 

The iron and steel products maker's stock fell as much as 16.4 per cent during the day to ₹340 per share, the biggest intraday fall in atleast over a year. The stock pared losses to trade 14.5 per cent lower at ₹347.3 apiece, compared to a 0.08 per cent advance in Nifty 50 as of 9:40 AM. 

 

Shares of the company have fallen for the fifth consecutive session and currently trade at 88 times the average 30-day trading volume, according to Bloomberg. The counter has risen 16 per cent this year, compared to a 4.3 per cent advance in the benchmark Nifty 50. Man Industries has a total market capitalisation of ₹2,633.21 crore. 

Sebi bars Man Industries, top executives 

The Securities and Exchange Board of India (Sebi) said that it found the company had failed to consolidate its unit, Merino Shelters, in its financials between fiscal years 2015 and 2021, misrepresented related-party transactions, and engaged in round-tripping of funds to mask its financial position.

 

Sebi appointed a forensic auditor in November 2021 to examine the company's books of accounts during the investigation period.

 

The company, in an exchange filing, said that Sebi has finally disposed of the long-pending legacy matters for the financial year 2015 to 2021. Further, the regulator imposed a monetary penalty of ₹25 lakh on the company and penalties of ₹25 lakh each were levied on Chairman and Director Ramesh Mansukhani, Managing Director Nikhil Mansukhani, and former Chief Financial Officer Ashok Gupta.  CATCH STOCK MARKET LIVE UPDATES TODAY

Man Industries clarifies on financial impact

The company said the penalty is minimal relative to its size and operations and will not affect day-to-day business. The company continues to maintain a strong order book of over ₹4,700 crore and remains fully operational. 

 

Since the company does not engage in securities trading, Sebi's directions restraining market access have no impact on its core operations. "The company is examining the order in detail and will seek appropriate legal remedies available against the said order." 

Man Industries Q1 results 

The company reported a 44.99 per cent year-on-year (Y-o-Y) increase in net profit to ₹27.62 crore for the quarter ended June, compared with ₹19.05 crore in the same period last year. The growth came despite a 0.88 per cent decline in sales to ₹742.13 crore from ₹748.70 crore a year earlier.

 

At the operating level, Ebitda rose 28.2 per cent to ₹49.4 crore from ₹38.5 crore, with the Ebitda margin improving to 6.6 per cent from 5.1 per cent in the year-ago quarter.