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The inventory has greater than doubled within the house of a fortnight with the turnover surging 286 per cent in the identical interval and deliveries averaging 79 per cent. The good points of the inventory, nonetheless, have been pushed solely by its title, somewhat than by the enterprise it does.
Bombay Oxygen Funding was once a provider of oxygen, however stopped promoting industrial gases over two years in the past.
It’s presently registered as a non-deposit taking non-bank monetary firm underneath the purview of the Reserve Financial institution of India (RBI) and as per its personal disclosure of 2019, the corporate is producing revenues from its monetary investments.
“It is acquired pumped up as an oxygen manufacturing firm dealing in industrial gases on social media. Somebody desperately needs an exit,” Amit Kumar Gupta, head of portfolio administration providers at Adroit Monetary Providers, mentioned in a tweet on Sunday.
Gupta was one of many first ones to identify the anomaly.
The episode highlights the rising energy of social media platforms reminiscent of Twitter, WhatsApp and Telegram on funding and buying and selling selections of market contributors. It additionally brings to gentle the quantum of manipulation that exists within the Indian inventory market as merchants and traders, particularly retail, fail to do due diligence in a rush to bag the following huge multibagger.
Regulators such because the Sebi are nonetheless unable to deal with the menace of such tip-based investing which finally finally ends up burning the fingers of retail merchants and traders.
Bombay Oxygen’s surge typifies the quirk within the home fairness market, the place a torrent of first-time traders has discovered earning profits comparatively simpler as one in each two BSE-listed inventory doubled over the previous 12 months.
Armed with zero-fee brokerage accounts and recommendation from rising social media influencers, retail traders have taken the fairness market by storm in India however not with its personal drawbacks.
“A number of establishments together with the Monetary Stability Board and RBI have raised issues of an rising disconnect of the monetary markets with the true economic system and the doable threat it could pose to systemic stability,” Sebi Chairman Ajay Tyagi mentioned in a current speech.
“This rising disconnect is one other prevalence witnessed in at this time’s occasions which presumably has no precedent earlier than,” Tyagi mentioned.
Whether or not this episode at Bombay Oxygen will nudge retail traders to do extra due diligence earlier than leaping on to a inventory that was really useful on some social media platform stays to be seen, nevertheless it ought to immediate the regulators to usher in insurance policies that may power inventory exchanges to nip such occurrences within the bud.