GTL Ltd., whose market value fell by more than half in Mumbai, said “speculative activity” by domestic investors triggered the record crash in its stock.
Shares of the company which manages telecommunication equipment for mobile-phone companies plunged 62 percent to 127.95 rupees. More than 73 million shares, or more than twice the number of shares available for trading, changed hands, data compiled by Bloomberg show. Group company GTL Infrastructure Ltd. slumped 43 percent, the most ever, to 16.95 rupees.
“Today’s stock fall has nothing to do with medium and large investors, and is on account of speculative activity,” founder and Chairman Manoj Tirodkar told Bloomberg UTV in an interview. “Institutional investors have not voiced any cause for concern and there’s no panic. Long term investors continue to believe in the business model. The fundamentals are intact.”
Speculation lenders sold GTL shares pledged with them by the founders aided the slump. Founders pledged 12.5 million shares, or 24.46 percent of their holding, according to an April 29 filing to the exchange. Creditors to the owners of the company haven’t sold the shares, Tirodkar said.
“There are significant concerns regarding GTL’s funding position and I think somewhere the promoter’s shares which have been pledged must have been hit,” said Sudip Bandyopadhyay, managing director of Destimoney Securities Pvt. in Mumbai. “How else can one explain such a steep fall.”
Founders own 52.71 percent of GTL, the statement said.
India’s benchmark stock index fell to a four-month low today after a report the government sought to tax capital gains on investments routed through Mauritius sparked a selloff.