Shares of barely-traded PSU, India Tourism Development Corporation have rallied 795% over the last five months, on negligible volumes. On Monday, trading in the stock has been frozen at the upper end of the 5% intra-day circuit filter at Rs 981.40
The low trading volumes is not surprising, given the highly concentrated holdings in the stock. The government holds 92.11% in the company, Indian Hotels owns 7.87% and the rest is held by individual investors.
It is surprising why buyers have been bidding up the price over the last six months when the company does not have the fundamentals to justify the high valuation.
Its book value is Rs 36, and the company’s revenues have remained stagnant over the last five years.
The sharp rise on low trading volumes also indicates there could be a deliberate attempt to ramp up the stock price.
The stock is now trading at an extravagant price to earning ratio of 470 times its 2011-12 earnings. The company is debt free, but has contingent liabilities of Rs 476 crore.
|Company Name||No of Shares||Face Value||Investment Amount||Latest Price||Market Value|
|Bajaj Hindusthan Ltd.||1255000||Rs. 1.00||0.45||26.7||3.35|
|Bajaj Finserv Ltd.||3387036||Rs. 5.00||17.67||910.7||308.46|
|Bajaj Auto Ltd.||6774072||Rs. 10.00||18.25||2055.5||1392.41|
|Bajaj Finance Ltd.||1638720||Rs. 10.00||21.61||1303.4||213.59|
|Bajaj Holdings & Investment Ltd.||3387036||Rs. 10.00||46.65||906.35||306.98|