Mishtann Foods Share Crash: The decline in the stock of Gujarat based penny stock company Mishtann Foods continued on Monday 9 December 2024. In today's session, the stock has fallen by 20 percent from Rs 10 to Rs 9.94 and the stock has hit a lower circuit. After SEBI's action, investors are selling Mishtann Foods shares in a hurry, due to which the stock has fallen flat. 

Mishtann Foods fell 37 percent in 2 days 

On Monday, December 9, the stock of Mishtann Foods opened at Rs 9.94 with a fall of 20 percent and as soon as it opened, the stock got a lower circuit. In the last session, the stock closed at Rs 12.42. In the last two days, the stock has fallen by about 37 percent. On December 5, the stock of Mishtann Foods closed at Rs 15.52 and from that level the stock has fallen by Rs 5.56. On February 6, 2024, the stock made a high of Rs 26.36. And from that level, the stock has fallen by 62 percent.  

Why is Mishtann Foods falling?

Stock market regulator SEBI has banned five entities associated with the company, including promoter and CMD Hitesh Kumar Gaurishankar Patel, from transacting in the securities markets until further orders. These people are accused of financial irregularities, fraudulent transactions, and negligence in corporate governance. SEBI has ordered Mishtann Foods to recover Rs 100 crore manipulated through fake transactions. SEBI has also banned the company from raising public funds for seven years.  

SEBI sought clarification

In its order, SEBI has asked the company to bring back Rs 49.82 crore raised from the rights issue which was wrongly diverted. Apart from this, Rs 47.10 crore has been transferred to promoters and directors through fake transactions. SEBI found in its investigation that the company has misled investors and regulators by exaggerating financial transactions. According to the SEBI report, the number of public shareholders of the company was only 516 in the financial year 2017-18, which increased to 4.23 lakh by September 2024. During July-August 2024, the promoter has sold shares worth Rs 50 crore and reduced his stake in the company. SEBI has sought clarification from 24 units of Mishtann Foods within 21 days.