Khatau Makanji Spinning, a firm listed in the Z group of the BSE, was quoting at Rs 24 six months ago, but zoomed 2,183 per cent to Rs 548 by Monday. Khatau is not alone. There are several other companies which have shot up, riding the boom on Dalal Street.Why is the Khatau scrip rising? Its performance is hardly anything to cheer about. It posted a turnover of Rs 1 crore and a loss of Rs 17.27 crore for the fiscal 2004-05. “Can a company, which has made a huge loss, shoot up in this fashion?” asks a trader on the street.The Sensex has been on an upward march in the last three months and hit an all-time high of 7,288 on Monday. “Riggers are using the sustained bull-run in the market to manipulate dud shares. Many of these companies don’t have any projects, offices or plants. Investors need to be careful,” said NSE dealer and investor Pradip Bhavnani.Nearly 85 firms in the Z group have shot up between 50-2100 per cent in the last six months. The Z group comprises companies with dubious credentials and those that violated listing norms. Most are small companies with a minor capital base. Take Jayavant Products which rose 736 per cent to Rs 21.75 from Rs 2.60 in six months. It barely managed to post a turnover of Rs 2 lakh and a net profit of Rs 1.1 lakh for the quarter ended December 2004. Belapur Industries, which shot up by 459 per cent to Rs 45.00 from Rs 8.04, posted a loss of Rs 7.1 lakh and a gross income of Rs 2.1 lakh.“Shares of small firms are rising without any basis,’’ said a BSE broker. ‘‘Companies like Phoenix Mills rose so high even as the regulators chose to sleep,’’ he added.
