Small-cap stock Elitecon International hit the 5% upper circuit in Wednesday’s trading session following a sharp surge in the Indian stock market. The small-cap stock opened at ₹39.11 today, as compared to the previous close of ₹38.57 and touched an intraday high of ₹40.49.
The Indian stock market traded with strong gains on Wednesday. The Sensex surged 1,133.53 points, or 1.48%, to start at 77,981.10, while the Nifty 50 opened 321.15 points, or 1.35% higher at 24,163.80 amid hopes of a second round of US-Iran truce talks.
According to the data available on BSE, around 9.86 lakh shares of Elitecon International changed hands on Wednesday. It is to be noted that there were no fundamental triggers behind today’s rally in the small-cap stock, and it appeared to be largely sentiment-driven.
Elitecon International’s recent business updates
In an exchange filing on April 10, Elitecon International said that the company had received a show cause notice from the Directorate General of GST Intelligence (DGGI) Lucknow Zonal Unit, with respect to compliance under the provisions of the Central Goods and Services Tax Act, 2017.
The show cause notice issued to Elitecon International Limited proposes certain demands towards tax, i.e. equivalent to ₹221.89 crore and interest, penalty, i.e. equivalent to ₹129.18 crore and recovery, i.e. equivalent to ₹91.22 crore of refund under the applicable GST laws.
The company has been called upon to explain why such proposed demands should not be confirmed. The matter is currently at a preliminary stage, and no final liability has been determined, the filing said.
Accordingly, the financial impact, to the extent quantifiable at this stage, remains contingent upon the outcome of the adjudication proceedings. The company is in the process of examining the notice and will take appropriate legal measures to respond and defend its position, it said.
Furthermore, on April 4, Elitecon International informed the exchanges that Sachin Ashokrao Sabale, Chief Executive Officer, Susanta Kumar Panda and Anjali Bamboria, who were the Non-Executive Independent Director of Elitecon International Limited, have resigned from their posts.
According to a report by The Economic Times, markets regulator Sebi had issued an interim order against Elitecon International, barring its key promoters from participating in the market, citing prima facie evidence of misleading disclosures, governance shortcomings, and suspicious trading in the company’s shares, on March 31.
The order identifies several individuals as noticees, including Vipin Sharma and Pawan Kumar Ray, among others, along with the company itself.
Sebi’s probe highlighted an abnormal surge in the stock’s price and trading volumes, raising suspicions of possible market manipulation. The regulator reviewed trading trends and investor interest in the scrip, suggesting that the price movement did not reflect the company’s underlying fundamentals, according to the report.
Elitecon International’s share price trend
Elitecon International share price has largely remained under pressure in the near term. The stock has shed 13% in two weeks and over 23% in a month.
Furthermore, the stock has descended nearly 51% in three months and 61% in year-to-date (YTD) basis.
However, the stock has more than multiplied investors’ wealth by delivering 3,700% returns in the last five years.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
