Amtek Auto shares saw strong buying interest for a second straight session on Monday. From Thursday's close at Rs 30.40, Amtek Auto shares have nearly doubled at Monday's intraday high of Rs 57.90.
The rebound comes after days of selling, which saw Amtek Auto shares crash from Rs 164.50 on August 10 to Rs 30.40 on September 10.
Amtek Auto, struggling under huge debt and fears of default, on Friday said it is considering selling of non-core business, minority stake in overseas firms and some industrial real estate assets to overcome financial crisis
The auto component maker said its promoters had infused Rs 75 crore to address the "temporary cash flow mismatch" last month, and added that more funds may be infused.
Amtek is also facing a probe by market regulator Sebi for alleged share price manipulation at its subsidiary Castex Technologies; Sebi is investigating the possibility of rigging in Castex Technologies' share price through forcible conversion of foreign bonds, according to a Press Trust of India report.
What Should Investors Do
Some traders attributed the strong momentum in Amtek Auto to aggressive short covering. There is no fundamental reason for the jump in stocks, they added.
TS Harihar, chief executive and founder of HRBV Client Solutions advised investors to not be "adventurist" as far as Amtek Auto is concerned.
"There are better choices available... There is a typical pattern to what has happened in Amtek. We have seen what happened to Castex... Rebounds will happen, but it is better to stay away from the stock," he said.
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