NEW DELHI: Shares of PC Jeweller slumped 60 per cent in Friday’s trade on panic selling by investors on speculations that the promoters might have business relationship with IT firm Vakrangee BSE -9.99 %, which according to Mumbai Mirror is being probed by Sebi for possible stock manipulation.

Data available on the NSE showed that Vakrangee bought 20 lakh PC Jeweller shares at Rs 561.71 apiece on January 25 aggregating Rs 112.32 crore.

“Vakrangee bought crores worth of PCJ shares last week. Why would an IT company look out for investments in a jewellery maker? It certainly raises concerns,” said Kishor Ostwal, Chairman and Managing Director, CNI Research BSE -1.69 %.

In a clarification to exchanges PC Jeweller said that none of its promoters had diluted stake in the company and none of their shares are pledged as collateral with any institution. It said its fundamentals remained strong as the company continues to witness good footfalls and sales in the ongoing quarter.

Some analysts noted that Vakrangee in its treasury investment policy released on January 30 set certain guideliness, which suggest direct equity investments by the company is not permissible. The PC Jeweller investment was significant as far as Vakrangee’s cash and cash equivalent is concerned. This might have led Vakrangee to offload PC Jeweller shares on Friday, they speculated.

Shares of PCJ narrowed the losses. The stock, which 59.69 per cent to hit a low of Rs 195.10, closed the day 24.40 per cent down at Rs 365.60 on BSE.

According to documents available with Mumbai Mirror, the trading in the Vakrangee scrip was analysed by both NSE and BSE from January 1, 2016, to June 30, 2016, and September 1, 2016, to June 15, 2017, after it was suspected that certain entities were trading the scrip and increasing its market gross.

An NSE analysis report of trading of Vakrangee scrip between January 1, 2016 and June 30, 2016, showed that a group of 22 clients related to each other as well as to the company were continuously buying and selling the scrip, accounting for 74.87 per cent of market gross on certain days, Mumbai Mirror reported.

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