Maharashtra Scooter spurts up

Maharashtra Scooters today opened 4.5% higher at Rs.12113.50 and rose further to an intraday high at Rs.12,561.30. Its 52-week high stands at Rs.12,787.85. Its 2-week average traded quantity is less than 750 shares.

The company, an Investment Holding Company (IHC), remains buoyant ever since SEBI

Identified it as an eligible IHC for special-call auctions. The special call auction for price discovery is scheduled to be held on 28 October’24 and that’s what is keeping the price so green since the past few days.

SEBI had introduced a ‘Special Call Auction Mechanism’ aimed at improving price discovery for the scrips of listed Investment Companies and Investment Holding Companies. This mechanism addresses the issue of these companies’ stocks being traded infrequently and often at prices significantly lower than their disclosed book values. These companies typically have no daily operations and primarily invest in various asset classes, including the scrips of other listed companies. The discrepancy between the market price and the book value adversely affects liquidity, fair price discovery, and investor interest.

Starting in October 2024, SEBI conducted special auctions without price limits, based on the most recent audited financial statements of these companies. This means the stocks can be bought and sold at any price during these auctions, which should help establish a fair market value. SEBI has set clear rules to identify which companies can participate, ensuring that only those listed for at least one year and not suspended from trading are included. This process aims to bring transparency and fairness to how these stocks are priced.

The company is a subsidiary of Bajaj Holdings and 99% of its assets are invested in listed companies.