Core Education: Institutional selling indeed led to the carnage

It was the sale of shares pledged by the promoters of Core Education & Technologies Ltd that led to the carnage in the stock. The stock this week tumbled from a high of Rs 300 to a low of Rs 49.5, within four trading sessions.

What probably had added to the pressure was the unwinding of the position held by a Mauritius-based fund that offloaded a huge chunk of its holding in the counter.

But the data showing selling by institutions is at variance with what the company had told the media on the day of the carnage claiming that none of the institutions with whom they had pledged their shares had sold any of them.

According to the data furnished by the company to the BSE today, four entities had sold a total of 44.55 lakh shares pledged by the promoters due to margin calls. Of this, the single largest seller was IFCI Financial Services Ltd that had on February 27 sold 36.95 lakh shares pledged with it. On February 25, three other institutions had sold Core Education shares.

While Pinkhem Investment Company Pvt Ltd had sold 4 lakh shares, Gateway Leasing Private Ltd offloaded 1.40 lakh shares and Prabhudas Lilladher Financial Services Ltd disposed off 2.20 lakh shares.

The other major seller was Cresta Fund Ltd, Mauritius, which had held 55,14,689 shares constituting 5.3084 per cent of the equity. On February 25, the fund sold 28,16,123 shares forming 2.9512 per cent of the equity. After the sell-off, its holding declined to 2.3572 per cent of the equity with 26,98,566 shares.

The data of selling by institutions which had invoked promoters’ pledged shares due to margin calls is in contrast with the claim made by the company after the avalanche of selling. Nikhil Morsawala, Director (Finance) of the company had said that "we have spoken to all institutions and confirmed that none of them has sold any of our shares pledged with them".

In fact, the selling spree by institutions with whom Core had pledged its shares had continued on February 28 also when IFCI Ltd invoked and sold 24,99,128 shares, according to the data furnished by Core Education to the stock exchanges today.

Despite the offloading, still over 2 crore shares of promoters are pledged with financial institutions.

The Core Education stock, which had plunged to a fresh 52-week low of Rs 49.65 on the NSE today, has bounced back strongly by 21.58 per cent to Rs 67.05, a gain of Rs 11.90. The counter had recorded a trading volume of 1.60 crore shares by about 1.15 p.m.

COMMENT NOW