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News Entry# 179642
Jun 10 2014 (11:17) Shakuntala Express stock chugs past records - The Times of India (
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News Entry# 179642   
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Shakuntala Express stock chugs past records Shishir Arya,TNN | Jun 10, 2014, 01.26 AM IST manager NAGPUR: The relic train Shakuntala Express may be continuing its slow journey through the Vidarbha countryside from Yavatmal to Achalpur, but stocks of the company on whose tracks this train chugs have zoomed past all records.
Amid the euphoria at the bourses, scrips of the British era Central Provinces Railway Company (CPRC), now defunct for all practical purposes, have touched the upper circuit, closing at Rs125.80. This is an appreciation of 132% within six months after it touched the 52-week low of Rs54 on December 19, 2013. LIC continues to hold over 14% in CPRC, while Chandrapur-based company SG Glassworks, promoted by relatives of former Gondia
MP Praful Patel, has a 5.78% stake. The central government too holds 2.78% stake.
The company was set up during the colonial times to run a train to transport cotton from Yavatmal to Achalpur, for shipment to Manchester from Mumbai. After independence, it was taken over by the Indian promoters and now it is the only private railway company in the country. The Central Railways now run a passenger train Shakuntala Express on the century old tracks, which are badly in need of repairs. It is CPRC's liability to repair the tracks, for which it claims to have no funds. The railways find the revenue from the track to be rather low to finance track repairs.
The stocks rally is suspicion since the volume in Monday's session was just 377 shares. The share has always recorded minuscule volumes, sometime as low as 10 shares exchange hands, but there has been a steady increase in the prices. When the upper circuit was touched, trading was automatically suspended temporarily.
The company's fundamentals defy the stock's performance. CPRC has been in losses since last few years, and has not declared any income. It has a revenue sharing agreement with the Central Railway, but the funds are adjusted against pending repairs by the former. The railways have demanded Rs18 crore from the company, a claim which CPRC disputes. The railways have a right to take over the tracks but are not interested due to lack of economic viability. As of March 2014, CPRC has booked a loss of Rs9 lakh.
SR Himmady, the company secretary, said it seems to be some operator's job and the company is not aware about it. Experts say the stock market rally has also led to several penny stocks touching the roof. It is easy to jack up rates of stocks which have a thin volume. "Though it cannot be said specifically abut CPRC, it is often happens that stock prices are artificially jacked up by operators who resort to circular trading in thin volumes and later offload it," said Nirav Pachmatia of AUM Financial Advisors.
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