Orchid Pharma Ltd. Registers 6500% Growth After Being Bankrupt
The bankrupt Orchid Pharma Ltd. is registering a steep rise in its stock prices. Its stocks have increased by about 6500% in just 4 months starting November 2020. The upper circuit started right from the day when the company was relisted on 3rd November 2020 with new promoters taking the charge.
Who bought Orchid Pharma Ltd.?
Dhanuka Lab bought the Orchid Pharma Ltd. under the resolution plan if NCLT and relisted it on the stock exchange in November. Soon after the relisting, the stocks Orchid Pharma Ltd. adopted an upward trend. Its stocks have been put on an upper circuit every day including today when the its stocks have a 5% upper circuit.
At the time of relisting, the company’s share sold at only Rs. 18 but today it is Rs. 1186. In March 2020, the company registered a revenue of Rs 505.45 crore and loss of Rs 149.84 crore. But its revenue slumped to Rs 102.63 crore and lost Rs 45.33 crore in December but it didn’t prevent the stocks from rising.
What is the reason behind Orchid Pharma Ltd. stocks getting a high price?
The share of Dahnuka Labs in Orchid Pharma is 98.04% and rest of the shares are divided into financial institutions and retail investors as 1.19% and 0.5% respectively. The present distribution of stocks reveals shortage of shares for retail buying and it is what driving the company’s stocks to upper circuit. It is exactly what happened with Patanjali’s company Interested Soya (Ruchi Soya) and Reliance’s bankrupt company Alok Industries.