Shares of Brightcom Group hit decrease circuit for the straight twelfth session in a row because the inventory hit its new multiyear lows at Rs 10.26 on Wednesday. The Shankar Sharma-owned inventory is on the verge of being a ‘penny inventory’ for buyers. Nonetheless, it already has trapped many at greater ranges.

There isn’t a theoretical definition for penny shares. Nonetheless, shares in single-digit costs or beneath Rs 10 are bracketed on this membership. Brightcom Group, with a market capitalisation of little greater than Rs 2,000 crore, is about to fall in the identical class.

Low promoter holding, excessive debt, fixed loss and muted financials are some typical traits of penny shares. Buyers may get trapped within the low-hanging fruits as they will degrade the standard of investments.

Shares of Brightcom Group (BCG) have been hitting decrease circuits since April 10, 2023. The inventory closed at Rs 18.59 on BSE on Thursday, April 6, 2023. The inventory has been within the sub-Rs 10 vary for the primary time after June 2021, simply earlier than its exponential rise, which became a multibagger.

The scrip was locked within the vendor’s circuit of 5 per cent on Wednesday at Rs 10.26 on Wednesday, marking one other session of promoting stress. Shares of Brightcom have dropped greater than 88 per cent from its 52-week excessive at Rs 87 on April 26, 2022. The inventory has cracked 65 per cent on the year-to-date (YTD) foundation in 2023 up to now.

Shares of Brightcom Group have been below stress since markets regulator SEBI has issued a present trigger discover to the ad-tech agency. It additionally flagged issues and made observations concerning the irregular and incorrect submitting of shareholding sample of the corporate. SEBI mentioned that the figures weren’t rightly reported which violated the norms.

The market watchdog made sure key observations, Brightcom mentioned, which had been on the impairment costs in its stability sheet for FY20 amounting to Rs 868.30 crore, shareholding sample, compliance and reporting, amongst others. The corporate, in its response, mentioned authorized recommendation is sought with respect to the general matter.

The counter was as soon as thought-about a multibagger. It has surged about 3,000 per cent to Rs 118 stage in December 2021 from a value of lower than Rs 4 in Could similar yr. Regardless of this fall, the inventory nonetheless holds its multibagger standing because it has delivered a return of 365 per cent within the final 5 years.

Even after this steep selloff, market analysts see extra ache within the inventory. They imagine that the inventory is headed for an additional fall of 50-70 per cent from present costs and counsel buyers to maintain off such falling knives.

Brightcom share costs might stay below promoting stress to the touch the degrees of Rs 5-2 within the close to time period, mentioned Ravi Singh, Vice President and Head of Analysis at Share India. “Buyers are suggested to exit their holdings instantly because the outlook of the inventory may be very unsure and gloomy,” he mentioned.

Brightcom Group is backed by seasoned Dalal Road investor Shankar Sharma who owned 2,50,00,000 fairness shares, or a 1.24 per cent stake, within the firm. His stake in Brightcom Group is presently price Rs 25.65 crore.

BCG on its quarterly charts, gave a consolidation breakout of Rs 5 ranges within the June 2021 quarter & witnessed a large transfer nearer to 25 occasions in a short while span of three quarters. Nonetheless, the inventory quickly fizzled out & noticed a steep fall within the final back-to-back six quarters, mentioned Sujit Deodhar, Head Technical Analyst at Wellworth Share & Inventory Broking.

Picture: Chart-BCG

“It appears the inventory is more likely to take a look at the assist ranges of 5 as the general construction seems to be weak. Technical indicator Stochastic is deeply oversold, so as soon as the inventory approaches the assist zone & stabilizes, one can then search for alternatives however for now one ought to keep away from a falling knife,” he advised.

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