Chandrababu Naidu's Heritage Foods Plunges 5% On Day Of His Swearing-In; Hits Lower Circuit

Today was the day of Chandrababu Naidu's comeback to Andhra Pradesh's throne, just one term after his rival Jagan Mohan Reddy's tenure, which ended with his defeat in the recently concluded assembly election. Naidu was sworn in as the CM of Andhra Pradesh on June 12.

Heritage Foods Hits Lower Circuit

All this was good news for Naidu and his allies, but this was not necessarily the case for Naidu's company, Heritage Food.

The dairy products manufacturing company's intraday trade on June 12 plunged 5 per cent or Rs 33.00. The shares hit the lower circuit, forcing the regulators to halt trading for the company.

The price of the individual share stood at Rs 627.30 when trading was halted. Trading is halted in the case of a stock reaching the upper or lower circuit to avoid misuse or exploitation of the system, by investors with vested interests.

This development is interesting, given the jump the company shares made in the week following Naidu's victory in the elections on June 4. The company shares had risen to 4.35 per cent, just in the past 5 days.

Company Shares Surge After Election

In addition, the company shares have grown 72.79 per cent just in the past month of trading. And, it is not just Heritage Food, the Naidu family's net worth has also jumped by Rs 1,200 crore. The markets are trading in green, with Sensex gaining 0.33 per cent or 248.56 points, reaching 76,705.16. Nifty gained 0.34 per cent or 78.05 points, taking the total number to 23,342.90.

The company, which was founded by the Andhra CM in 1992, was brought to the share markets two years later. The IPO was issued in 1994.

Trading for the stock is expected to resume tomorrow. It remains to be seen whether the company's shares will rebound in tomorrow's trade.