Shares in VRL Logistics crashed 20 per cent in trade today and hit the lower end of the circuit filter, after the company's promoters said that they plan to foray into the airline business.
"The board members should note that we may seek to dilute a portion of our present holding in VRL Logistics in order to provide us with liquidity to enable our investment for the aviation venture," the promoters said in the filing to BSE.
The company clarified that through a release to the exchanges, that it is now foraying into the airline business and only the promoters plan to do so in their individual capacity.
"The promoters of the company have indicated that the release is only a statement of intent and they intend to continue to hold a majority stake in the company as also devote substantial time and energy to the company," it later clarified through another release to the exchanges.
To compound misery for the shares the results were bad. Net profits at the company almost halved to Rs 13.21 crores from Rs 24.71 crores. The company attributed the same to an increase in employee costs.
The shares of VRL Logistics were locked at the lower end of the circuit filter at Rs 314.75.
Analysts say that there maybe more downside risk to the stock, from not only the aviation foray of the promoters, but also due to poor results.
The shares of VRL Logistics already having a very high price to earnings multiple.