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Sweet Foods Share Crash : The shares of Gujarat-based penny stock company Mishthan Foods continued to fall on 9 December 2024. In today’s session, the stock fell 20 percent from Rs 10 to Rs 9.94 and the stock hit lower circuit. After SEBI’s action, investors are continuously selling shares of Mishtan Foods, due to which its price has fallen.
Sweet Foods down 37 percent in 2 days
On Monday, December 9, shares of Mishtan Foods fell 20 per cent to close at Rs 9.94. Lower circuit in stock. In the last session the share had closed at Rs 12.42. The share price has fallen by 37 percent in the last two trading sessions. Shares of Mishtan Foods had closed at Rs 15.52 on December 5 and from that level the stock has declined by Rs 5.56. The stock reached an all-time high of Rs 26.36 on February 6, 2024, and the share price is down 62 percent from that level.
Why is the share price falling?
Stock market regulator SEBI has banned five entities associated with the company, including promoter and CMD Hitesh Kumar Gaurishankar Patel, from trading in the securities market till further orders. These people are accused of financial irregularities, fraudulent transactions and negligence in corporate governance. SEBI has recovered embezzled money from Mishthan Foods. An order has been given to recover Rs 100 crore. SEBI has also barred the company from raising public funds for seven years.
SEBI’s response
In its order, SEBI has asked the company to bring back Rs 49.82 crore raised from the rights issue, which was wrongly diverted. Additionally, Rs 47.10 crore has been transferred to promoters and directors through fraudulent transactions. SEBI, in its investigation, found that the company had misled investors and regulators by overstating financial transactions. According to a SEBI report, the number of public shareholders of the company was only 516 in the financial year 2017-18, which has increased to 4.23 lakh by September 2024. During July-August 2024, the promoter has committed Rs. 50 crore shares and reduced his stake in the company. SEBI has sought clarification from 24 units of Mishthan Foods within 21 days.
