Mumbai : Shares of Eros International Media crashed over 19 % amid reports of downgrade and concerns over its business operations by financial services major Wells Fargo.
The stock nosedived by 19.11 % to settle at Rs 354.40 on BSE. During the day, it slumped 19.88 % to Rs 351.
At NSE, shares of the company dipped 19.33 % to Rs 353.60. The company’s market valuation declined by Rs 782.1 crore to Rs 3,311.90 crore. As per media reports, Wells Fargo raised questions about the company’s growing business in the United Arab Emirates. The BSE sought clarification from the company with reference to the news that Eros International is under Wells Fargo’s scanner and reports of stock downgrade.
In a clarification to the BSE, the company said, “We believe that the recent movement in share price volatility at our NYSE (New York Stock Exchange) listed parent level and today at Indian stock exchanges are based on speculative media reports.” Analysts downgrade or upgrade stocks regularly and that as such is not a cause for concern, it said.
“Note that Wells Fargo did not revise down their earnings estimate for the quarter or the year and the price target is $22, well above the price the stock was trading on the date it was published.”
“We would like to reassure our shareholders that there has been no material change to the previously announced strong fundamentals of the company,” it added. Our first quarter results have been strong and nothing has materially changed since then, the company said. “We will be announcing what we expect to be a strong second quarter in the first half of November,” it added.
