The Indian Stock Market has been seeing an increasing number of scandals and scams which coincides with the wider society as well.Couple of days back a stock market scandal resulted in a market operator and 4 companies being banned for stock manipulation.This resulted in sharp stock losses in midcap favorites and fast growing companies like Ackruti City and Welspun Corp.This brought to the fore the dangers of investing in Indian markets and particularly real estate stocks.Even companies and sectors associated with real estate like housing loan finance companies and banks frequently get embroiled in these scams.LIC Housing Finance which was performing extremely well over the past year cracked by almost 40% in 2-3 days as its MD got arrested for taking bribes.Indian Stock Market New Day Old Story – Promoter -> Land Scam -> Stock Plunges -> Investor Loss
Now uFlex which belongs to the packaging sector which has seen an exponential increase in stock price has also joined the scam gang.The sector has seen massive price appreciation with some stocks gaining ~5x in a short period of one year.However uFlex which was one of the stars of the rally fell by a circuit down 20% as its Managing Director Ashok Chaturvedi was sentenced to 4-year imprisonment in Noida land scam.There was nothing wrong with the company as such and nothing can be made out from its past financial which look very good.However stocks in India have a lot of unseen risk with lots of promoters involved in white collar crime.It pays to be very very careful while investing in the Indian stock market.
Shares of Uflex were under pressure after reports that the CBI Special Court has sentenced Ashok Chaturvedi to 4-year imprisonment in Noida land scam . The stock plunged 20 per cent to Rs 195.50 on the NSE. It touched a low of Rs 195.50 in trade so far on volume of 47.96 lakh shares