Shares of Polycab India surged nearly 7% intraday on Monday as traders covered short positions taken in the futures and options segment of the cable-maker over the last few sessions, where it crashed by nearly a third amid reports of tax evasion.
Polycab shares rose 3% on Friday as bottom-fishers took action after a 21% drop on Thursday due to income tax raids uncovering unaccounted cash sales of around Rs 1,000 crore. The company clarified that the income tax department has not named Polycab and there has been no written communication regarding the outcome of the raids. HNIs and institutional investors have sold Polycab shares. Axis Capital reduced the target price due to uncertainties after the raid and expects a multiple derating until the charges are proven otherwise.
Retail investors incurred a loss of ₹3,108 crore. At the end of Q2FY24, retail investors held 20,388,755 shares, constituting a 13.58% stake in the company.
Polycab I-t Raids: "The Company understands that there is a press release titled ‘Income Tax Department conducts search operations in Mumbai’ published on January 10, 2024 by Press Information Bureau, Delhi, which does not specifically name any company. The Company reiterates that as on date, the Company has not received any written communication from the IT Department regarding the outcome of the search," Polycab said.