Funds managed by Fidelity International halved their holdings in PC Jeweller this week, shedding more than two-thirds of their original stake in the New Delhi-based company that lost about 60 per cent of its market value in seven trading sessions until Wednesday.
Direct and indirect subsidiaries of Fidelity and funds managed by the global asset manager sold another 3.53 per cent (1.39 crore shares) on the stock market on Monday, cutting their stake to 3.51 per cent (1.38 crore shares), Fidelity informed Mumbai stock exchanges on Thursday.
Fidelity funds held 9.58 per cent stake in the company as of April 20. The price of the PC share then was Rs 295.80. Fidelity informed the stock exchanges that funds managed by it had cut their stake to 7.04 per cent on April 27 (last Friday). The price of the share then plunged to Rs 177.80 apiece, almost 40 per cent. On April 30, Fidelity through its funds sold 3.53 per cent more. The price on that day fell to Rs 144.5. On Wednesday, it slumped further to Rs 110.65, down 62.6 per cent from April 20.
Garg, who is a co-promoter and MD and CEO of the jeweller, said that he is yet to “figure… out from the investor” the reason for the recent exit.
Fidelity International press contacts in Hong Kong and the UK didnt respond to ETs queries until the publication of this report.
Market sources said panic selling was initially triggered among investors after Padam Chand Gupta, the other promoter, gifted a part of his stake to a relative, raising concerns that more such deals could follow.
The build-up of open interests (mostly short positions) on the PC derivatives counter resulted in the stock entering the F&O ban period. On Wednesday, against market-wide positions of 3.13 crore shares, combined open interest across exchanges was 3.56 crore shares. A day later, the cutting of existing positions (mostly shorts) pushed the share up 11 per cent to Rs 122.90.
On Thursday, combined OI reduced to 3.22 crore shares. However, the stock continues to remain in F&O ban until open interest reaches 85 per cent or below of market-wide positions, said derivatives analysts.