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.