In order to curb extreme volatility in the markets and curtail market risk for gullible investors, Securities & Exchange Board of India along with the stock exchanges decided to implement Additional Surveillance Measures in early June. The measures involve putting stocks that display big high-low variation in trading, high client concentration, multiple price-band hits, high closing price to closing price variation and extraordinarily high PE ratios in a curtailed trading mechanism that will allow trades only with 100% margin and with a 5% price-band.
Some misinformation about the mechanism has caused unwarranted concern and consternation among prospective investors and existing shareholders of companies that find themselves on the list. While the regulators have clearly indicated that being on the ASM list “does not indicate an adverse action against company', fears abound.
To better inform investors about the fundamentals of several companies on the list, CNBC-TV18 has launched the SEBI WATCHLIST, which will seek to better inform investors about the strengths and weaknesses of the businesses in order to enable them to take more informed decisions, and segregate the bad apples from the good.
Liquor stocks gained in trade on Tuesday with shares of Globus Spirits, Radio Khaitan, United Breweries Ltd and others jumping between 0.33 and 9.27 percent.
Radico Khaitan shares jumped more than 8 percent on Tuesday, continuing its uptrend from the last two days. During the period, the smallcap stock has surged nearly 12 percent.
Radico Khaitan, formerly known as Rampur Distillery & Chemical Co Ltd, is reportedly the fourth largest Indian liquor company and it manufactures various types of whisky, rum, brandy, vodka and gin.
Some of its famous product offerings include 8PM whisky, Contessa rum, Magic Moments vodka, Morpheus and others. The stock touched an intraday high of Rs 394, after opening with a gain of 4.80 percent.
At 1.05 pm, shares of Radico Khaitan quoted at 384.90 apiece, higher by 5.73 percent, adding Rs 20.85 in value to the stock. The stock had closed at Rs 364.05 on Monday. More than 6.2 lakh shares traded on the NSE on Tuesday.
Globus Spirits shares traded at Rs 172, jumping nearly 10 percent on the NSE. The stock touched the day's high of Rs 172.30, rising 10 percent in trade on Tuesday. It opened at Rs 164.3, surging more than 7 percent in trade.
GM Breweries shares also rose more than 5 percent to trade at Rs 602, while United Breweries climbed 0.25 percent to Rs 1,158.
All three, Radico Khaitan, GM Breweries and Globus Spirits moved out of Additional Surveillance Measure (ASM) framework on Tuesday along with more than 100 stocks today.
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