Kiocl Shares Surged 40% In Three Days: Here's Why
The stock hit 20% upper circuit for two consecutive days after operations resumed in the company's Mangalore plant on Oct. 13.
Shares of Kiocl Ltd. surged 40% in three days after operations at its Mangalore pellet plant were resumed.
The stock hit the 20% upper circuit for two consecutive days after the company announced the resumption of operations at the plant on Oct. 13. Operations were suspended due to the non-availability of iron ore fines and maintenance activities.
The government-owned pellet maker has faced three suspensions of operations since July 3.
Since the Mangalore plant is the only pellet plant in the company, its stock has rallied strongly every time operations have been resumed. It has given flat returns during the periods when the operations were suspended.
Shares of Kiocl surged 150% since July 3, compared to a 2.51% rise in the benchmark Nifty. One reason for the stock's volatility is the low free-float market capitalisation of the company. The government owns a 99% stake in the company, with only 1% of the Rs 28,000 crore market capitalisation being free float.
Shares of the company rose as much as 9.03% before paring gains to trade 3% lower at 10:00 a.m. This compares to a 0.03% advance in the benchmark NSE Nifty 50.
The stock has risen 103.44% on a year-to-date basis, compared to a 9.4% rise in Nifty. The relative strength index was at 79, indicating that the stock may be overbought.
