Pradip Overseas sinks 44% as traders exit on pre-bonus rally

Pradip Overseas, an Ahmedabad-based textile company, has been in the thick of action on the bourses in the past few days. After gaining almost 32% in five trading days from October 3 to October 10, the stock has plunged almost 44% in the ensuing three days till Monday.

Operators pushed up the stock after the company, late last month, said the government has allowed the company to withdraw from the proposed special economic zone ( SEZ), for which the company had raised around Rs 116 crore though an initial public offer (IPO) in March 2010.

Soon after the offering, the company had changed the IPO object clause to use the proceeds as working capital.

Traders, who were sucked into the stock early last week, were in for a shock on Friday after the share rally suddenly reversed after the company announced a bonus share issue on Thursday during market hours, though the stock did not react when the announcement was made. Brokers said operators exited the stock during the rally.

(Contributed by Rajesh Mascarenhas)