Financial firm with ‘oxygen’ in its title sees share costs skyrocket as Covid disaster places medical oxygen in information

It is alleged that public sentiments majorly drive the investments made within the inventory markets. And within the occasions of the COVID-19 outbreak, there are fewer issues that will sway public opinion as readily as oxygen—one thing in excessive demand throughout the pandemic. As a end result, scores of traders have parked their cash in shares of the businesses that they suppose would handle the rising demand for medical oxygen within the hope to make supernormal positive factors until the disaster lasts.
With the rising demand for medical oxygen reported from a number of components of the nation, a raft of traders invested their cash in a comparatively obscure firm named Bombay Oxygen Investments Ltd, believing that the corporate is all set to register spectacular income because the requirement for oxygen intensifies throughout the pandemic. Consequently, the share worth of the corporate reached an higher circuit restrict Rs 24,574.85 apiece on the BSE on Monday, with the utmost permissible acquire of 5 per cent as a result of inventory being below surveillance. Except, the corporate had little to do with the manufacturing of medical oxygen.
Bombay oxygen inventory moved 10000 to. 25000 in final one month, as a result of oxygen requirement in 2nd corona wave. This is an NBFC firm, they don’t even make oxygen, simply have oxygen of their title.. pic.twitter.com/prIWD4XbkS— 🦁 (@AndColorPockeT) April 19, 2021
Ever because the resurgent wave of the coronavirus hit the nation and the oxygen demand soared, the shares of Bombay Oxygen Investments Ltd has seen a pointy uptick. From buying and selling at Rs 10,000 ranges round March 22, the inventory has risen nearly 150 per cent to Rs 24,574 ranges in lower than a month. The rise within the inventory is especially sharp following April 5, by the way across the similar time the shortage of the medical oxygen in lots of hospitals throughout the nation started to be reported.
Source: BSEMarket analysts consider the first cause behind this stellar rally is the title of the organisation that has oxygen in it and which has led traders to consider that the organisation is into the enterprise of producing the medical oxygen. The title has enthused sufficient traders to take a position their monies within the organisation, which has nothing to do with oxygen manufacturing.
Bombay Oxygen Corporation Ltd listed as NBFC on the Bombay Stock Exchange
The web site of the corporate ‘Bombay Oxygen Corporation Limited’ says it was integrated on October 3, 1960. However, it modified its title to ‘Bombay Investments Limited’ with impact from October 3, 2018. The web site additionally talked about that the corporate’s “primary business was manufacturing and supplying of industrial gases which have been discontinued from August 1, 2019”.
Instead, the corporate is now a Non-Banking Financial Company(NBFC) that “owns substantial financial investments in the form of shares, mutual funds and other financial securities, and income from such financial investments is the source of revenue of the company”. It has been licensed by the RBI “for carrying on the business of Non-Banking Financial Company (NBFC) without accepting Public Deposits.”
Though many market analysts declare that the corporate not offers in oxygen, the web site of the corporate nonetheless lists oxygen as one of many ‘products’ it offers in. The part says the corporate is ‘Manufacturer and Dealer of Industrial Gases’ and lists oxygen, nitrogen, argon, carbon dioxide as merchandise.
Notwithstanding this contradictions, the BSE web page described the corporate as an NBFC.
Earlier this month on April 8, BSE sought info from the corporate after there was a heightened exercise in its inventory worth. The BSE sought a clarification stating it “wanted to ensure that investors have the latest information about the company and to inform the market so that the interest of the investors is protected”.
The firm responded to this question saying “All the material information and announcement that may have bearing on the operations (or) performance of the company which includes all the necessary disclosures… have always been disclosed by the company within the stipulated time”.
“There is no pending information or announcement which may have a bearing on the price movement of the company. Therefore, the movement in the share price of the company is market-driven and the company is in no way connected with any such movement in price,” the corporate informed the BSE in its response on April 9.
As per its newest quarterly monetary outcomes, the corporate reported a complete earnings of Rs 33.79 crore and a revenue of Rs 31.69 crore for the quarter ended December 31, 2020. The firm now instructions a market capitalisation of over Rs 368 crores. While the vast majority of the corporate shares are held by the promoters, who personal greater than 73 per cent, the majority of the general public shareholding is with small retail traders.
Share worth nosedives by 5 per cent following the experiences of the corporate not producing oxygen
Soon after it dawned upon the traders that the corporate Bombay Oxygen Corporation Ltd isn’t related to the manufacturing of medical oxygen that’s in big demand throughout the pandemic, the share worth of the corporate started to plummet.
Source:BSEOn Tuesday, the shares of Bombay Oxygen Corporation Ltd opened with a decrease circuit, down by 5 per cent on account of inventory being below surveillance. The share worth of the inventory is at present hovering round 23,346 ranges, down from 24,574 ranges a day earlier. As traders realised that the corporate isn’t into the manufacturing of oxygen, numerous them made a beeline to promote their shares and sq. their positions. This resulted within the inventory worth touching the decrease circuit, which means there have been solely sellers out there and no consumers.