Stock Market’s Pump & Dump show in Tata Teleservices Rises 20%

Spread the love

Cabinet Waiver of Bank Guarantee Lifts Telecom Stocks

By S Jha

New Delhi, November 26: Shares of Tata Teleservices on Tuesday gained 20 per cent to hit upper circuit. Gains in the counter came on the back of the Cabinet decision to waive off bank guarantees for telecom operators.

Shares of Tata Teleservices on Tuesday closed at ₹82.89. The scrip had been slipping on the bourses for several days before turning around with the decision of the Cabinet. The Raisina Hills had reported last month about the impending decision to waive off the bank guarantees.

Shares of Tata Teleservices were in massive demands. Close to six lakh shares of the telecom operator had been traded on NSE alone late afternoon on Tuesday. Telecom sector buzzed through Tuesday on the back of the government waiving off the bank guarantee. The decision is seen by market participants benefiting the telecom operators who had been facing cash crunch.

by rising to the level of ₹533 in July this year.

Also Read: Waaree Energies Vows Profitability Independently of Tariffs

Shares of Tata Teleservices had allegedly been victims of pump and dump in 2021. The Shares of Tata Teleservices were trading at ₹12.50 on May 21, 2021. From this level, the shares of Tata Teleservices climbed with exponential growth.

In a classical case of pumping a stock, the shares of Tata Teleservices rose from the level of ₹12.50 to ₹206 on December 31, 2001. The shares of Tata Teleservices rose by 150 times in valuation within seven months in 2021.

The market participants had been puzzled, for there were no visible changes in the fundamentals of the telecom operator. The financials also showed no cues for the meteoric rise in the share price of Tata Teleservices.

Also Read: Netweb Technologies Hits Bull’s Eye with Multiple Breakouts

Further, the shares of Tata Teleservices in a classical case saw an uninterrupted saga of lower circuits for several weeks. From the high of ₹206 on December 31, 2001, the shares of Tata Teleservices went crashing to ₹55 on March 23, 2023. For 18 months, the shares of the telecom operator kept falling in prices.

The shares of Tata Teleservices spent another 18 months in consolidation. The scrip traded in the range of ₹55 to ₹65. But the shares of Tata Teleservices sharply climbed 20 per cent on Tuesday to lock in the upper circuit on Tuesday.

Also Read: E2E Networks Reverses Losing Streaks to Lock in UC

The face value of shares of Tata Teleservices is ₹10. The ROCE (Return on Capital Employed) of the telecom operator is over 47. It reported an operating profit of ₹138 crores in the September quarter. This was marginally better than ₹134 crores in the June quarter.

Earnings per share remain in negative for the company at -1.69, which in the September quarter marginally deteriorated against the -1.65 of June quarter. Domestic institutional investors have negligible stakes in the company.

Join the WhatsApp Channel of The Raisina Hills