At 52-week low! Mishtann Foods share price hits lower circuit for 4th session on SEBI ban | Stock Market News

Stock Market Today: Shares of Mishtann Foods hit their lower circuit limit for the fourth consecutive session on Wednesday, December 11, as the fallout from the Securities and Exchange Board of India’s (SEBI) ban over fraud activities deepened.

The penny stock opened at its 10 per cent lower circuit of ₹8.06, marking a fresh 52-week low. However, it partially recovered, trading 3.5 per cent down at ₹8.64 by 9:30 am.

Mishtann Foods share price was locked in the 10 per cent lower circuit on Tuesday, December 10, and 20 per cent lower circuits on Friday, December 6, and Monday, December 9. With an intraday decline of 10 per cent, the penny stock has now shed nearly 60 per cent of its value over these four sessions.

SEBI Ban Details

SEBI barred Mishtann Foods, its promoter, and CMD Hiteshkumar Gaurishankar Patel, along with four other entities, from the securities market until further notice. The interim order cited financial mismanagement, fraudulent transactions, and corporate governance lapses as key reasons for the ban.

The regulator’s findings came after an investigation covering the period from April 1, 2017, to March 31, 2024. The investigation revealed significant financial irregularities, including circular trading with fictitious buyers and suppliers, many of which were identified as shell entities controlled by the company’s directors and their associates.

SEBI alleged that Mishtann Foods inflated its sales and purchase figures by creating fake entities. Many of these entities were linked to CMD Hiteshkumar Patel and his relatives, distorting the company’s financial performance.

The investigation also highlighted a sharp rise in the company’s public shareholder base, from 516 in FY18 to 4.23 lakh by September 2024. Meanwhile, Hiteshkumar Patel offloaded shares worth approximately ₹50 crore between July and August 2024, contributing to a decline in promoter holdings since March 2024.

SEBI has issued show-cause notices to 24 entities, including Mishtann Foods and its key officials, demanding responses within 21 days. The investigation was prompted by complaints of GST fraud and financial irregularities.

Mishtann Foods Responds

In its defence, Mishtann Foods dismissed SEBI’s allegations, stating that the interim order was not final. The company emphasised its intent to address the regulator’s concerns and resolve the matter through legal channels.

“The SEBI notice is NOT a final order but seeks explanations from the company. Mishtann Foods disagrees with the contents and observations in the interim order,” the company said in a filing.

The company assured stakeholders that its business activities and growth plans remain unaffected and committed to protecting stakeholder interests.

“Mishtann Foods takes pride in being a law-abiding corporate with the highest standards of integrity and corporate governance. We are confident that this period of confusion will pass, and we will emerge unscathed,” the statement added.

Stock Performance

Mishtann Foods’ stock has declined 52 per cent in 2024 so far, with losses recorded in eight of the 12 months. The stock has extended its downward trend, losing almost 39 per cent in December alone, marking the sixth consecutive month of fall since July.

Over the last year, the penny stock has shed over 45 per cent of its value. From its 52-week high of ₹26.37 in February 2024, the stock is now down by more than 69 per cent at its 52-week low of ₹8.06.

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