Massive price rigging in low-cap stocks, prices zoom up to 3,700 per cent

SEBI chairman D R Mehta said the regulator had asked stock exchange to identify cases of price manipulation. “It’s theresponsibility of stock exchanges to find out why price manipulation is taking place and what action has been taken,” Mehta said. In fact, SEBI had written a letter to the stock exchanges pointing out abnormal price movements in several scrips. “There may not be apparent justification for various and sundry scrips, particularly in low cap group, to rise in a sudden fashion,” SEBI said.

As like in the software sector, operators have started manipulating in the shares of low cap and mid-cap finance companies. Several known finance companies like Kotak Mahindra Finance (around 500 per cent to Rs 230), DSP Merrill Lynch and Alpic have shot up on the markets due to different reasons. Seeing the rise in the prices of these companies, price manipulators have started rigging in small finance companies.

The rise in the prices of such dud stocks has nothing to do with any change in the fundamentals of these companies or the economy. Sensex has not gone up significantly in the last two months and remained in the4,600-5,000 range.