Shares of Poonawalla Fincorp surged 4.3 percent on Thursday, May 18, to touch a 52-week high following the resolution of a case involving alleged insider trading in the company's shares, as four entities reached a settlement with the markets regulator, SEBI.
The entities settled the case with a payment of ₹10.97 crore towards the settlement charges, with the following contributions: Rakesh Bhojgdhiya HUF ( ₹4.29 crore), Rakesh Bhojgdhiya ( ₹3.74 crore), Murlidhar Agrawal ( ₹1.20 crore), and Amit Agrawal ( ₹1.72 crore).
During Thursday’s trade, the stock opened at a price of Rs. 330.95 per share against the previous close of Rs. 328.55 per share and grew further during the early trading session to touch a 52-week high of Rs. 342.90.
It was trading at ₹341, up by 3.79 percent, at 11:40 a.m. on the NSE.
The stock touched a 52-week low of Rs. 209.15 on June 20, 2022, indicating that at the current price, it is trading over 63 percent above that level.
The stock has shown a growth of nearly 10 percent in the last six months. Moreover, in the past one year, it has given a positive return of over 34 percent. Furthermore, in the last five years, the stock has gained almost 89 percent.
On February 10, 2021, Poonawalla Fincorp released a corporate announcement through the stock exchanges regarding the acquisition of a controlling stake in Magma by Rising Sun Holdings Private Ltd, a Poonawalla Group entity, and the raising of ₹3,456 crore in fresh capital through a preferential allotment by Magma.
Following the corporate announcement, the market regulator received an alert indicating potential insider trading by specific entities in Magma's stock in February 2021.
After conducting an investigation into the trading activity of Magma's stock from January 2021 to February 2021, SEBI determined that the applicants, based on prima facie evidence, possessed insider information regarding Poonawalla Group's intention to invest in Magma, which had not been publicly disclosed. Utilizing this information, the applicants traded Magma's stock and generated profits.
Post that, SEBI issued an interim order on September 15, 2021, restraining the entities from engaging in securities transactions and freezing their bank accounts to the extent of the alleged illicit gains.
SEBI stated in two settlement orders that the specified proceedings initiated against the applicants through a show cause notice dated September 15, 2022, have been concluded in accordance with the Settlement Regulations, following the acceptance of the settlement terms and receipt of the settlement amounts.
Poonawalla Fincorp Limited, formerly Magma Fincorp Limited, is an India-based non-banking finance company. The company is engaged primarily in the business of financing. It provides asset finance through its pan-India branch network.
According to a MintGenie poll, 8 analysts on an average have a ‘BUY’ call on the stock.