Surana solar showing 9% uptick .. RJ pick yesterday ..— Teen Do Paanch (@TeenDoPaanch) June 10, 2015
It appears that nobody wanted to miss out on a stock that Rakesh Jhunjhunwala had invested in, and everybody from traders to analysts and even journalists assumed that the investment was done by Rakesh Jhunjhunwala, the billionaire investor widely followed for his multi-bagger ideas.
Surana Solar management started getting calls from across the country as analysts sought more clarity about the little-known company.
The buying momentum in Surana Solar shares, however, came off post noon and the stock hit a lower circuit minutes before the scheduled stoppage of trade yesterday.
Surana Solar shares ended 13.55 per cent lower at Rs 45.95, off the day's high of Rs 62.40. By the end of the trading, 58 lakh Surana Solar shares had changed hands, compared with a daily average of just over 1.41 lakh shares last week.
The selloff in Surana Solar remained a mystery for many until Mr Jhunjhunwala clarified that he had no investment in Surana Solar. It was a namesake of Mr Jhunjhunwala, who had bought these shares.
Yesterday rakesh Jhunjhunwala buys some Surana solar. Today stock goes up 10% then drops to 20%,lower circuit. Whoops.— Deepak Shenoy (@deepakshenoy) June 10, 2015
Haha. There is another guy named rakesh Jhunjhunwala it seems. Ooh.— Deepak Shenoy (@deepakshenoy) June 10, 2015
Surana Solar shares crashed 20 per cent on Thursday, prompting calls for an investigation by market regulator Securities and Exchange Board of India or Sebi.
"Should SEBI investigate how this fake RJ bought Surana Solar -Who lent him 2 buy this 'gem'? This is his maiden pick - recently opened account," tweeted independent analyst Ambareesh Baliga.
Shud SEBI investigate how this fake RJ bought Surana Solar -Who lent him 2 buy this 'gem'? This is his maiden pick - recently opened Account— Ambareesh Baliga (@ambareeshbaliga) June 11, 2015
Company caught in crossfire:
Surana Solar shares were locked down in lower circuit at Rs 36.80 on Thursday. Other group companies were also caught in the crossfire; Surana Ventures crashed 20 per cent today, while Surana Telecom and Power ended 6.55 per cent lower.
Narendra Surana, chairman of Surana Solar told NDTV that his company got involved in an "unnecessary" controversy. Surana Solar's performance continues as before and there is absolutely no reason for such kind of selling, he added.
"It looks like someone with the same name as the big investor took advantage and made a killing, but the name of the company has been spoiled. They (authorities) should look into this, but what can they do? People will fall for it...eventually the company will lose out," Mr Surana said.
(With inputs from Reuters)