EVOQ Remedies: Promoters of This Company Sold More Than 50% Stake in a Span of Two Days – A Reason for Worry?
The promoters of BSE-listed SME company EVOQ Remedies have sold approximately 52% of their stake in the last two trading sessions amid a surge in the stock to record levels.
1. Promoter Stake Sell-off: Over the past two trading sessions, promoters of EVOQ Remedies, a BSE-listed SME company, divested around 52 percent of their stake, coinciding with a surge in the stock’s value.
2. Stock Surge Trigger: The stock witnessed a 20 percent upper circuit on January 10, propelled by the announcement of a substantial Rs 136 crore export order. However, it later surfaced that promoters had offloaded a significant portion of their shares through open market sales.
3. Export Order vs. Market Cap Discrepancy: The export order, seven times the market capitalization of Rs 22 crore, originated from Marlexx Pharma, a US-based company, according to EVOQ Remedies’ filing. A noteworthy point is that a search would reveal Marlex Pharma, not Marlexx, as a pharmaceutical company situated in New Castle. This typo or discrepancy has created confusion among investors.
4. Unusual Trading Volume and Promoter Sales: The stock’s 20 percent surge drove up demand, prompting significant sales by promoters Bhumishth Narendrabhai Patel and Payal Bhumishth Patel on January 10. The trend continued on January 11, with Bhumishth Narendrabhai Patel selling 3,060,000 shares and Payal Bhumishth Patel selling 1,848,000 shares. This resulted in a noteworthy shift in ownership, reducing promoters’ stake from 73.53% to 20.53%.
5. Impact of Ownership Shift: The transition from promoters to the public acquiring shares signifies a substantial shift in the company’s dynamics. The data reveals that 51% of total equity was traded, indicating a clear change in ownership.
6. Future Concerns: The significant reduction in promoter holdings and the subsequent increase in public ownership raise apprehensions about the company’s future.
In summary, the sequence of events, starting from a sizable export order to a notable divestment by promoters, presents a nuanced scenario for EVOQ Remedies, urging cautious evaluation by potential investors.
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