Sigachi Industries Shares Pare Intraday Loss After Promoters Raise Stake
Stock Volatility Amid Promoter Stake Increase
Sigachi Industries’ share price witnessed sharp volatility on Wednesday, February 8, 2025, as the stock initially dropped over 5% before recovering some losses. The small-cap stock fell as much as 5.78% intraday to touch a low of ₹35.53 on the BSE. However, the stock rebounded, hitting an intraday high of ₹38.22 per share, before closing marginally lower.
The fluctuations came amid a major development in promoter shareholding, as key stakeholders Amit Raj Sinha and Swati Sinha increased their stake in the company through the conversion of warrants into equity shares.
Promoters Increase Stake in Sigachi Industries
In a regulatory filing, Sigachi Industries revealed that Amit Raj Sinha acquired 1.40 crore shares, while Swati Sinha purchased 90 lakh shares. Following the acquisition, Amit Raj Sinha’s stake increased to 5.49%, while Swati Sinha now holds 2.36% of the company’s equity.
Before this transaction:
- Amit Raj Sinha held 70,10,022 shares, which accounted for a 2.10% stake in the company.
- Swati Sinha had no prior shareholding.
This move has boosted the total promoter shareholding in Sigachi Industries, which stood at 44.71% as of December 31, 2024. Meanwhile, public shareholders held a 55.29% stake in the company.
The acquisition was conducted via a preferential allotment route, leading to a rise in Sigachi Industries’ equity share capital from ₹33.34 crore to ₹38.21 crore. The company now has 38,21,17,010 shares of ₹1 face value in circulation.
Key Promoter Holdings
- RPS Industries Pvt Ltd, a major entity within the promoter group, holds over 4.29 crore shares.
- Shares encumbered with Amit Raj Sinha and RPS Industries Pvt Ltd stand at 25 lakh and 3.23 crore, respectively.
Sigachi Industries Share Price Performance
The stock has been under pressure over the past few months, showing a significant downward trend:
| Timeframe | Stock Performance |
|---|---|
| Past 1 Month | Down 19% |
| Year-to-Date (YTD) | Down 26% |
| Past 6 Months | Down 38% |
| Past 1 Year | Negative 47% Returns |
Despite the recent promoter stake increase, the stock ended 0.64% lower at ₹37.47 per share on Wednesday. The market capitalization stood at ₹1,249.43 crore.
Fundamental Analysis & Key Financial Ratios
Despite the stock’s weak price movement, Sigachi Industries maintains a solid financial standing. Below is a snapshot of key financial ratios:
| Metric | Value |
|---|---|
| Market Capitalization | ₹1,232 Cr. |
| Current Price | ₹37.0 |
| 52-Week High / Low | ₹95.9 / ₹35.5 |
| Stock P/E | 17.8 |
| Book Value per Share | ₹14.2 |
| Dividend Yield | 0.27% |
| Return on Capital Employed (ROCE) | 16.7% |
| Return on Equity (ROE) | 16.4% |
| Debt-to-Equity Ratio | 0.29 |
| Industry P/E | 31.2 |
| Total Debt | ₹137 Cr. |
| PEG Ratio | 0.72 |
| Intrinsic Value | ₹68.0 |
| Graham Number | ₹26.2 |
| Piotroski Score | 2.00 |
| Price-to-Book Value | 2.61 |
| Return on Invested Capital (ROIC) | 13.4% |
What’s Driving the Stock’s Performance?
- Bearish Sentiment in Small-Cap Stocks
- The broader market weakness in small-cap stocks has weighed on Sigachi Industries’ performance, with selling pressure dragging it down over the past year.
- Rising Promoter Confidence
- The stake increase by promoters signals confidence in the company’s future prospects, which could be a positive long-term catalyst for the stock.
- Market Reaction to Equity Dilution
- The conversion of warrants into shares has increased equity capital, which can sometimes be seen as a dilution factor, leading to short-term stock volatility.
- Sectoral Weakness & High Competition
- The chemicals and industrial sectors have faced challenges, and the current stock P/E (17.8) is lower than the industry average (31.2), indicating potential undervaluation.
Investor Takeaway: Should You Buy, Hold, or Sell?
- For Long-Term Investors: The stock is trading at a discount compared to its intrinsic value (₹68.0), which could indicate a potential upside if business fundamentals remain strong.
- For Short-Term Traders: The ongoing volatility and weak technical trends suggest caution, with support near ₹35.5 and resistance around ₹40-42.
- For Growth Investors: The rising promoter stake is a positive sign, but the company needs to show earnings growth for a sustained rally.
Conclusion
Sigachi Industries shares have experienced high volatility, driven by stake acquisition by promoters and broader market weakness. While the stock has seen a sharp correction over the past year, its strong financials and rising promoter confidence could support future growth.
Investors should keep a close watch on upcoming quarterly results, industry trends, and promoter actions before making investment decisions.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.