- Ashoka Buildcon shares crashed 20%, then recovered to jump 4%
- The highway developer's office was raided by tax officials yesterday
- Ashoka Buildcon had denied links to jailed politician Chhagan Bhujbal
"Income Tax authorities are carrying out search and seizure proceedings at the premises of the company and certain officials," Ashoka Buildcon said in a statement to the Bombay Stock Exchange yesterday.
The morning selloff sent Ashoka Buildcon shares to their 52-week low of Rs 111, with two-day cumulative losses rising to 35 per cent. Ashoka Buildcon has been under huge selling pressure since last month, when the company was linked to Maharashtra politician Chhagan Bhujbal, who is in jail on alleged corruption charges.
The company has denied links to Mr Bhujbal, who earlier served as a Public Works Department Minister in Maharashtra.
"Ashoka Buildcon Ltd. clarifies that it has not contributed or financed any of the constructions of Bhujbal family including their bunglow at Nasik. It also clarifies that it has not sponsored the trip of Shri. Sameer Bhujbal then MP to watch and attend the FIFA World Cup in South Africa," the company said in a statement on March 26.
Despite recovery, market analysts advised investors against bottom fishing in the counter. Sanjeev Bhasin, executive vice president of IIFL, told NDTV Profit that he does not track the stock, but investors should exit Ashoka Buildcon on every rally.
"There can be rapid wealth erosion in such stocks, so it would be prudent to take out money on rallies and invest in quality names," he said.
Ashoka Buildcon is one of the largest highway developers in the country with a portfolio of over 28 PPP (Public Private Partnership) projects across nine states. The company also operates in the power transmission and distribution sector.
Ashoka Buildcon shares closed 3.91 per cent higher at Rs 141 on the NSE, outperforming the broader Nifty, which ended 0.89 per cent lower.