Lux Industries Tanks 20% After SEBI Bans Executive Director for Insider Trading

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Lux Industries Tanks 20% After SEBI Bans Executive Director for Insider Trading
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the innerwear company Lux Industries (NS: LUXI ) tanked 20% on Tuesday to Rs 2,813.7 apiece after the markets regulator SEBI banned the company’s executive director, Udit Todi on account of insider trading on Monday.

Sebi banned a total of 14 entities for insider trading on Monday and ordered Lux Industries to confiscate ill-gotten gains worth Rs 2.94 crore.

The regulator’s surveillance alert system had noticed a suspicious trading pattern in the company’s stock during an announcement made on May 25, on the financial results of Q4 FY21 and the FY21. In this development, Sebi witnessed a substantial rise in its profits on QoQ and YoY basis.

After the announcement, Lux’s stock price rose by 40.75% in three consecutive sessions. On analysis by Sebi, a group of connected entities were found to have obtained long positions in the stock, generating high profits.

The regulator’s further examination on the case revealed that Udit Todi passed on the Unpublished Price Sensitive Information (UPSI) to three of his connected entities, stated a PTI report.

As a result, the innerwear stock crashed 20% on Tuesday, shooting concerns over the company’s corporate governance.

It was among the biggest losers on Tuesday, as the benchmark equity indices Nifty50 and BSE Sensex ended the session higher, rebounding most losses amid low-buying, led by bank and auto stocks, snapping a 5-day losing streak. Nifty Bank ended 2.05% higher.

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  • Sandip Rayalwar @Sandip Rayalwar
    main question, can it b bought now?
    Like 2
    • Saqib Pathan @Saqib Pathan
      Avoid stocks with poor governance
      Like 2
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      100
  • MD Salman @MD Salman
    Nice
    Like 0

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