Gitanjali Gems at new low

The string of woes seems to be getting long drawn for Gitanjali Gems. The stock which seems to have become a permanent fixture as the top loser on the BSE, got all the more rooted at this spot today. The stock had hit a 52-week low yesterday at Rs.115.60 and today, it has hit another new low at Rs.109.85. The stock slumped 5% and is now frozen at this lower circuit. Over 18 lakh pending sell orders remained on the counter.

The new low today after the promoter of the company, Mehul Choksi and more than a dozen other entities that dealt in Gitanjali have been barred from trading in the stock market for six months.

NSE, investigating the unusual volatility in the stock and its subsequent crash, has disabled the unique client codes for as many as 26 entities which were active traders in the counter. This is one more woe adding to the company’s already brimming cup. First came the RBI’s restriction on gold imports and then bankers also decided to review their exposure to not just this company but most diamond companies which have very high leverages. The company is also trying to negotiate with some banks to convert their non-fund exposure into funded credit lines.