Amtek Auto, Castex plunge on Sebi probe
10 September 2015
Press Trust of India
Mumbai, Sep 10 (PTI) Shares of Amtek Auto plunged 9 per cent, while that of its subsidiary Castex Technologies lost 5 per cent today after market regulator Sebi began a probe into alleged manipulation of the latter’s stock price. Sebi has begun a probe into alleged share price manipulation at Castex Technologies through forced conversion of foreign bonds.Reacting to the development, shares of Castex fell 5 per cent and got locked in a lower circuit limit. The stock had also dropped nearly 5 per cent to close at Rs 42.45 on the BSE yesterday.
Amtek Auto counter also saw huge selling as the stock opened on a weak note at Rs 28, then fell 8.86 per cent to an intra-day low of Rs 27.75.
Over the last one month, Amtek Auto stock has tumbled over 80 per cent.
Sources said Sebi is seriously looking into the matter following allegations by some bondholders that efforts are being made to manipulate the share price of Castex Technologies by forcibly asking investors to convert their bonds.
In the wake of these complaints, the watchdog has started a probe into the issue, they added.
On July 31, Castex Technologies informed the BSE that its board of directors has decided to mandatorily convert all the outstanding bonds of USD 80.80 million out of FCCB (Foreign Currency Convertible Bond) issue of USD 130 million.
The date for conversion of bond into equity shares, would be September 10, 2015, it had said.
Auto component maker Amtek is grappling with financial issues and its shares have also taken a beating in the recent weeks, while exposure to its bonds have created ripple effects in the mutual funds and other market segments as well. PTI DRR ABM SA
Castex falls, hits lower circuit for 43rd straight session, on allegations of stock manipulation
11 September 2015
The Economic Times
NEW DELHI: Amtek group stocks took a beating, yet again. Amtek Auto plunged nearly 9 per cent, while group stock Castex Technologies (erstwhile Amtek India) hit its daily lower circuit limit in trade on Thursday amid reports the market watchdog SEBI is probing alledged share price manipulation in Castex Technologies through forced conversion of foreign bonds.
Sources told PTI that Sebi is seriously looking into the matter, following allegations by some bondholders that efforts are being made to manipulate the share price of Castex Technologies by forcibly asking investors to convert their bonds into equity shares.
On July 31, Castex Technologies had informed the BSE that its board of directors has decided to mandatorily convert all the outstanding bonds of $80.80 million out of foreign currency convertible bond (FCCB) issue of $130 million.
Following the fresh development, Castex Technologies hit its lower circuit of 5 per cent at Rs 40.35 as soon as the opening bell rang.
This was the 43rd straight session when the stock hit its lower circuit limit of 5 per cent.
Amtek Auto declined 8.87 per cent to hit its day’s low of Rs 27.75. The stock was down over 10 per cent in pre-open trade.
A rub-off effect was observed on other group stocks JMT Auto and Metalysts Forgings, which hit their lower circuit limits of 5 per cent each.
Amtek Auto has been in news ever since the stock nosedived 30% on August 19. The stock has been excluded from the F&O segment. The company has acknowledged that there is a temporary cash flow mismatch.
The stock has lost nearly 82 per cent of its market value in the past one month.
Last month, JP Morgan Mutual Fund, which has exposure to Amtek Auto, restricted redemptions from two of its debt schemes — Short Term Income Fund and India Treasury Fund.
The new development may add further pressure on the group stocks.
Amtek Auto arm Castex Tech under SEBI lens over price swings
12 September 2015
The Economic Times
MUMBAI: Capital market regulator Sebi has starting investigating the share price movement of Castex Technologies, an auto parts maker and a subsidiary of debt-laden Amtek Group. The Sebi is examining the trading details of Castex after some of the bond holders of the company alleged price manipulation of the stock, with an aim to push it up so that it triggers the mandatory conversion of the foreign currency convertible bonds (FCCB), which starts on Thursday.
As per the agreement with bond holders, shares of Castex (formerly Amtek India) had to remain above Rs 170 for thirty days for the mandatory conversion to trigger. Castex’s stock price went up from Rs 41.40 on March 23, 2015 to Rs 361.85 on July 13,2015 (76 trading sessions). The price remained above Rs 170 for more than 48 days, thus meeting the mandatory conversion condition.
Since it touched its all-time high of Rs 361.80 on July 13 the stock has fallen 88 per cent to Rs 40.35 with consecutive lower circuits. Lower circuit is the threshold limit for the stock to fall. In this case, the limit was 5 per cent. Between April 1 and July 13, the stock rallied almost 530 per cent. Some of the bond holders who converted their FCCB into equity shares to take advantage of the rise in stock price were unable to exit as the stock started hitting a lower circuit.
An email sent to Castex seeking its response on the Sebi probe didn’t elicit any response.
In 2012, the company issued two sets of FCCBs — one of $130 million in April 2012 and the other of $70 million in September 2012. Both had a 6 per cent coupon rate. It converted all the outstanding bonds of $80.80 million out of the FCCB issue of $130 million on Thursday, while for the second set, all the outstanding bonds of $56.60 million of the $70 million would be converted on September 25,2015.
“The Allotment Committee of the Board of Directors of the company in their meeting held on September 10, 2015, allotted 39,405,266 equity shares of Rs 2 each at the fixed conversion price of Rs 103.005 per share, thereby effecting the conversion of the outstanding Bonds worth $80.8 million out of the $130 million 6 per cent FCCB issue,” the company informed stock exchanges.
Castex Tech row: Sebi widens probe; MFs under scanner
11 September 2015
New Delhi : In more troubles for crisis-hit Amtek Auto, Sebi has widened its investigation into alleged share price manipulation at its subsidiary Castex Technologies with role of banks, mutual funds and rating agencies also coming under the scanner. The capital market regulator has started an investigation into possible rigging of Castex Technologies’ share price through forcible conversion of foreign bonds. While it has taken a serious note of the allegations, sources said Sebi has expanded the probe into the matter suspecting that more players could be involved in efforts to manipulate the share price of Castex Technologies.
Besides promoters of the company, Sebi is now looking at the possible role of banks, mutual funds and rating agencies in the whole issue, according to sources.
It was alleged by some bondholders that efforts were being made to rig the share price of Castex
Technologies by forcibly asking investors to convert their bonds. Amtek Auto and Castex Technologies could not be immediately contacted for their comments.
Auto component maker Amtek is grappling with financial troubles and its shares have been battered in recent weeks.