F&O: Stock Nosedives 20%; Here’s What Happened

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F&O: Stock Nosedives 20%; Here’s What Happened
Credit: © Reuters.

By Aayush Khanna

One F&O share that has been making headlines for the last couple of sessions is Polycab India Ltd (NS: POLC ) Limited. The stock is seeing a never-ending fall and is down 27% this week so far, currently locked in at a massive 20% lower circuit to INR 3,929.5, by 9:57 AM IST. The volume for the week has already reached 8.8 million shares, which is the highest since July last year.

So what is happening with this counter? In a recent income tax department operation, the Polycab group, a prominent player in wires, cables, and electrical items manufacturing, faced scrutiny, revealing undisclosed cash sales amounting to around INR 1,000 crore. The Central Board of Direct Taxes (CBDT) disclosed that during the 22 December 2023 raid, over INR 4 crore in unaccounted cash was seized, and more than 25 bank lockers were restrained.

Covering 50 locations across Maharashtra, Gujarat, and Delhi, the operation raised questions about financial transparency and adherence to tax regulations within corporate entities. Though the CBDT refrained from explicitly naming Polycab, the company issued a clarification terming reports of tax evasion as "rumors."

This development underscores the need for vigilant oversight and enforcement of financial regulations, emphasizing the importance of compliance and transparency. As regulatory authorities investigate, it signals the significance of robust mechanisms to prevent and detect instances of tax evasion, ensuring accountability and ethical financial practices across industries.

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In case investors are thinking of buying the dip, they should not ignore the fair valuation of the company. InvestingPro+ lets you calculate the realistic intrinsic value of the stock with ease, which in this case is INR 3,942, leaving no margin on the value front.

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