Several media outlets have carried articles on involvement of KP in companies including Edserv and the mismanagement of the QIP. The mismanagement of the QIP stems from the point that the Sparrow India fund which was one of the institutions to take a stake through the QIP, exited the counter in weeks. It is being alleged that the company had roped in a third party to get Sparrow India fund to the board so that QIP can be closed. While this has been news on the company, there are also rumors that KP continues to rig the prices of several companies and Edserv could be one of them.
The market reaction on Friday, where the counter tanked close to a 10% was on the above happenings and developments. However, the above news is reaching the broader participants only recently and hence the counter may continue to witness negative impact.
We have always advised that the counter will be very volatile and one should not have more than 10% allocation for this company to the portfolio or precisely say one can have somewhere around 7% or less. We continue to have the same stance on the counter and no immediate Buy or Sell is advised. 176 to 180 has been one of the strongest support and in fact the base for the last 1 year for the counter. The counter though can take a hit should be able to bounce back.
$Team TMP
