Shares of Mishtann Foods Ltd. have been nosediving for three consecutive sessions and are stuck in the 10% lower circuit as of early trade on Tuesday, after the company issued a clarification on the show-cause notice issued by capital markets regulator SEBI.
The stock had plummeted around 20% to hit its lower circuit on Friday, and has fallen 27.94% in the last three sessions.
The management of Mishtann Foods has strongly denied all allegations mentioned in the show-cause order, which contained allegations of financial mismanagement and fraudulent transactions. The company claims that the allegations are based on assumptions, lacking credibility, and disconnected from reality, as per an exchange filing.
On Thursday, SEBI imposed a ban on five entities, including Mishtann Foods and its promoter, Chairman & Managing Director, Hiteshkumar Gaurishankar Patel, from accessing the securities markets until further notice. This action followed investigations into the company's activities.
The regulator's inquiry uncovered that Mishtann Foods had negligible fixed assets, negative cash flow from its operations, and abnormally low inventory levels relative to its significant sales during the investigation period. These irregularities were deemed likely to be fictitious, involving a circular flow of funds.
Mishtann Foods Share Price Today
Mishtann Foods share price fell as much as 9.96% to Rs 8.95 apiece, and is stuck in the 10% lower circuit as of 10:22 a.m. This compares to a 0.13% advance in the BSE Sensex.
It has fallen 45.95% on a year-to-date basis. Total traded volume so far in the day stood at 2.4 times its 30-day average. The relative strength index was at 21.25.
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