The stock of Kerala-based jewelry manufacturer Kalyan Jewellers India Ltd. continues its downward trend. On Thursday, January 16, the stock dropped by up to 6% from its daily high, following an 8% decline the previous day when it hit the 10% lower circuit limit.
With Thursday’s drop, the stock has fallen in 9 out of the last 10 trading sessions, experiencing a 30% decline over the past two weeks. The fall came after the company released its business update for the December quarter. Since January 3, the stock has only risen once, and is currently under a Futures and Options (F&O) ban, meaning no new positions can be taken.
The significant drop in Kalyan Jewellers’ stock is attributed to concerns over corporate governance, share pledging, and allegations of price manipulation with fund managers. During an analyst call, the company’s promoter and executive director, Ramesh Kalyanaraman, explained that the shares appearing as pledged were part of an agreement to buy shares from Warburg Pincus. He also dismissed allegations of bribing fund managers as “absurd,” emphasizing the company’s commitment to transparency and integrity.
Kalyan Jewellers’ board is set to meet on January 30 to approve the financial results for the December quarter. Despite the recent setbacks, the company opened 24 new showrooms in India in the last quarter and has a strong pipeline for more. The stock is trading below its moving averages, with an RSI of 24, indicating it may be oversold and could rebound. Among analysts, 8 out of 9 have rated the stock as ‘Buy’.
