Curious case of Orchid Pharma
15,376% Returns Bizarre
Orchid Pharma got listed on 3rd November 2020 @Rs 17.15 and it grew to ATH Rs 2654.25 in the span of 4-5 Months.
March 2017 went to NCLAT - Dhanuka Labs took over - 98% of shareholding of Orchid Pharma - Retail investors who had invested in Orchid pharma were alotted 1 share for every 218 shares they were holding. (217 taken away)
Entity had special treatment and they were holding 98% but with condition that they have to reduce their holding to 75% (which is usually the norm for listed company in india)
Story:
0.5% shares were traded in the market as this was the float at that time.
(2,06,480 shares only)
Scarcity of shares caused price surge. Seeing the price rise others got interested too. Demand for the shares increased leading to further stock price rise.
There were negligible people who were willing to sell and plenty of buyers leading to stock price rise. 5% circuit happened for several 100 consecutive days.
Ruchi soya once more.
SEBI revised the norms after this - Back from the death share holding companies will need to have 5% public shareholding at the time of listing. No more super small shareholding gimmicks. Well.
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