Based on our analysis, we are convinced that Jupiter Biosciences has duped investors by issuing GDR and is not worth consideration as investment. Its similar to the 7 companies that were banned by SEBI in August 2011.
Please find below some jottings on our company that strengthens our case:
- The company's profit fell drastically in 1Q 11 and 2Q 11.
- Promoters hold less than 5% in the company creating ample scope for fraud.
- The company had issued GDR @ Rs90 last year which were converted into shares and subsequently sold to retail investors at less than issue price.
- We remain convinced that the company had not received cash from the GDR issue. Most likely the promoters in collusion with operator had rigged share price before GDR issue. These GDRs were eventually converted into shares and then sold to public making a clean gain of over Rs150Cr.
- Its company secretary resigned in June 2011 giving further boost to the fraud theory.
- The only positive company had was its long track record of paying dividends, but even that was reduced this year.
Thus we foresee fraud in GDR issue in the the company and doesn't consider fit for investment purpose. There might be operator driven spurts in the stock but we don't have prowess to predict such short term movements.