Chemical sector firm India Glycols Ltd witnessed a steep sell-off during the morning trading session on Wednesday, September 2. Within just one hour of the market opening, the company's shares sank by 78 percent, tumbling from a high of Rs 1,111 to Rs 217 per share and surprising market participants.
Business Demerger Triggers Profit Booking
The sharp decline in stock value followed a major corporate restructuring decision by the company. India Glycols Ltd announced a plan to split its overall business operations into three separate entities. Following this announcement, investors engaged in intense profit-booking, driving the share price sharply downwards.
Ethanol Capacity Expansion Background
The company, which operates in the chemical and ethanol manufacturing sectors, has been expanding its production facilities. It recently added 200 KLPD capacity to bolster its ethanol business segment. Despite its operational expansions, the immediate market reaction to the tri-section demerger plan resulted in heavy selling pressure on the stock.
