Shares of adtech company Brightcom Group, in which ace investor Shankar Sharma holds a stake, were stuck in the 5 percent upper circuit limit for the second consecutive session on Wednesday after the company came out with a clarification to the stock exchanges on accounting irregularities. The firm said that it is taking remedial measures to improve its financial disclosures, according to a regulatory filing.
The smallcap stock has gained 83 percent in the last one month, while it fell 26 percent since the beginning of this year. The share hit a 52-week high of Rs 57.7 on July 25, 2022 and a 52-week low of Rs 9.27 on December 24, 2021.
In terms of technicals, the relative strength index(RSI) of the stock is at 71.2. RSI above 70 is considered overbought, implying that the stock may show pullback. Moving average convergence or divergence (MACD, or MAC-D) is at 1.0, which is above its center and signal Line, this is a bullish indicator.
According to a Moneycontrol report, accounting expert Nitin Mangal had pointed out that the financials of subsidiaries of Brightcom were inaccessible on the company's website. However, the group has now made the financials of its subsidiaries visible.
“We have uploaded the audited financials of our material subsidiaries on our website, and they are now accessible and fully visible,” the company said in an exchange filing.
The report also noted that 14 out of 16 Brightcom subsidiaries were not audited. To this, the company said that the statutory auditor audits the standalone financials of the company and consolidates the subsidiary accounts.
“Given the complexity of our operations across different countries and jurisdictions, we comply with local laws in each subsidiary, necessitating the involvement of multiple auditors for the audit function. Ultimately, the statutory auditor audits the standalone financials of the company and
consolidates the subsidiary accounts. Rest assured that Brightcom Group adheres to all regulatory requirements and international best practices for corporate governance, ensuring comprehensive disclosure of financial details for our Group subsidiaries in our consolidated financial reports” it stated.
About the "Other Advances" section in the balance sheet, Brightcom Group has said it is actively refining its reporting to provide a detailed breakdown of this category.
Market regulator SEBI had earlier issued a showcause notice to the ad-tech company. It also flagged concerns and made observations about the irregular and incorrect filing of shareholding pattern of the firm.
Brightcom Group shares are one of the beaten down stocks in Shankar Sharma's portfolio. However, the ace investor has remained invested in this digital marketing company's share, showing faith in this small-cap stock. This Shankar Sharma stock has lost to the tune of over 60 percent in the last one-year period. But, the bear-hit stock is trying to come out of base building mode as the stock has been hitting upper circuit for the last two trading sessions.
The investor holds 2.50 crore company shares, which is 1.24 percent of the total paid up capital of the company, according to shareholding pattern of the March 2023 quarter.
First Published: Jun 7, 2023 2:40 PM IST
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