PC Jeweller (PCJ), at the centre of a controversy over disclosure norms, tumbled over 10 per cent early on Wednesday.
The stock's free fall went into the ninth straight session.
It has now wiped off over 83 per cent of investors wealth from the January high. Its m-cap tumbled to Rs 3,817 crore (around 9.25 am) on May 3, from Rs 23,138.80 crore on January 17.
The share buyback announcement even failed to lift spirits. The company on Sunday told bourses that the board will meet on May 25 to consider the buyback proposal and dividend, if any, for 2017-18.
“Last week, Fidelity-managed funds sold about one crore shares," PTI quoted Managing Director Balram Garg as saying.
Fidelity-owned funds lowered their stake by 2.54 per cent in PC Jeweller last week and Garg sees major weakness in the stock because of further selling by the foreign investor. After the sale of little over a crore of shares by Fidelity last week, it held 7.04 per cent stake. ET could not immediately ascertain whether Fidelity had sold off its stake completely in PC Jeweller.
Meanwhile, stock exchanges have placed a ban on futures and options of the jeweller as its derivative contracts have crossed 95 per cent of the market-wide position limit.
The stock has been in a decline as promoter Padam Chand Gupta gifted some of his shares to family members through off-market transactions. The company is making requisite disclosures in this regard from time to time, PCJ said in a recent statement.
Yogesh Mehta of Motilal Oswal Securities in an interaction with ET Now said, “We are still trying to get in touch with the management of PC Jeweller, and so far there has been no clarity. We are also trying to gauge what is the situation in getting the core reasons for the fall. So far, nothing much from the management side and let's see if it is external reasons. Then, it is of no point. But if it is on a fundamental ground, then we need to have a very close watch on that. Sooner or later, we will come out with a note on that.”
Earlier this year, the stock saw panic selling amid speculations that its promoters might have held back information on a business relationship with e-governance service provider Vakrangee, which was reportedly being probed by market regulator Sebi for possible stock manipulation.
The Rs 13,000-crore scam involving businessman Nirav Modi and Mehul Choksi-led Gitanjali Group too proved to be a major headwind for Indias jewellery sector as domestic lenders have since become cautious in lending to these high cash-flow businesses.
But PCJ does not have any international transactions in diamonds. It procures its diamonds from local markets on cash basis.