Vakrangee Ltd., which claims to have more than 35,000 seva kendras across 16 States offering government and non-government services, is again battling market bears with almost 45% of its market capitalisation wiped out in less than a fortnight.
On Tuesday, the stock slid to its lower circuit of 5% to close at ₹77.45. The shares have hit their lower circuit for 11 straight sessions, eroding shareholder wealth by almost ₹6,200 crore.
The shares have lost about 82% since the start of 2018. The firm, currently valued at ₹8,200 crore, commanded a market cap of ₹54,571 crore in January. This is not the first time the Vakrangee shares have seen a long bout of selling pressure.
The nine trading sessions between February 19 and March 1 saw the stock hitting the lower circuit daily when the shares fell to ₹154.85. Starting March 22, the shares hit their lower circuit for 17 consecutive sessions till April 17 as the stock dipped from ₹285.60 to ₹119.7. The current fall has been accentuated with Price Waterhouse & Co. resigning abruptly as the auditor on April 27, stating that while it repeatedly sought information on matters related to ‘election books, bullion and jewellery businesses’ of the company, it failed to get any relevant information.
Vakrangee, however, asserted that Price Waterhouse had satisfactorily done the limited review for the period till December 31 and the fourth quarter audit was yet to begin.
‘True and fair view’
“The financial statements present the true and fair view of the state of affairs of the company,” a Vakrangee spokesperson wrote in reply to an email query. “The audit committee has also reviewed the financial statements and has been fully satisfied with all the information and explanations provided by the company.” The company had on May 5 appointed A.P. Sanzgiri & Co. as statutory auditor,, the spokesperson added.
“There was always a doubt on the number of seva kendras that the company claimed it had,” said an investor, who did not wish to be named. “Now the market will doubt the company’s financials as well.” .
“There has always been a buzz about a prominent market operator being active in Vakrangee stock. It is not unusual for such stocks to see such see-saw trends in the market at intervals as conflicting vested interests might be in play,” said another market participant on condition of anonymity.
Denying that store numbers had been inflated, the spokesperson said Grant Thornton had been hired to do an outlet quality analysis of the firm’s kendras.
