BSE to suspend trading in 499 scrips

Most of these companies were floated by shady promoters. Also many of these companies don’t have any business operations and exist on paper. As analysts pointed out, such companies were floated with the basic aim of collecting funds from the public through IPOs. "It’s better that such companies are allowed to have a natural death… but don’t create more in the future," said an investor.

According to market experts, some of the companies in the list were mismanaged and funds were diverted by promoters. A huge amount of FI/bank funds are also locked up in these companies. "Taking an average of Rs 5 crore equity, the total equity capital of these 499 companies will work out to nearly Rs 2,000 crore. The total project costs of these companies will work out to at least Rs 5,000 crore," said a merchant banker.

Some of the companies in the list are: Amar Dye-chem, Anant Rotospin, Aryan Finefab, Benzo Petrochemicals, Bhutta Printing, AVI Industries, Century Proteins, Chokhani Global, Core Organics, CRB Capital Markets, Dhar Cement, Concert Capital, GK Steel, Global Finance Corpn, Good Value Marketing, Ellora Steels, Gupta Carpets, Haryana Petrochem, HMG Industries, Hico Products, Jayant Vitamins, Jalan Ispat, Kiran Overseas, Ladam Finance, Malvika Steel, Maxworth Orchard, Mesco Pharma, Mideast, ONida Finance, Paam Pharma, Pertech Computers, Prestige HM Poly, Rajinder Steel, Raunaq Finance, Sanghi Polyesters, Shree Industries, Solidaire India, SVL Capital, Taminad Hospital, Thapar Exports, Trident Projects, Usha (India), Vidiani Agrotech and Zen Global Finance.

The BSE has about 8,700 stocks listed on the exchange. Of these, 141 stocks are listed on the most liquid and volatile segment of the exchange — the "A" group. In the cash segment, the B1 group has about 1083 stocks, B2 group lists 3734 stocks while the BSE has transferred about 1500 stocks to the Z group. After the last week’s reshuffle, the size of the B1 group has come down to 762 and the size of the B2 group increased to over 4,000 stocks. The scrips which in the suspension list are from the Z group.

While in the A group most of the 141 stocks are traded daily, it is not so in the other groups. In the B group, on an average, 1500 stocks are traded on a daily basis. After this reshuffle, the size of the B2 group would swell, taking the number of thinly traded stocks higher, brokers said.