Kalyan shares fall the most in 3 years as stake-sale fears spook investors

Mumbai: Shares of Kalyan Jewellers extended their slide for a ninth consecutive session on Wednesday, sinking more than 12% in their steepest single-day fall in three years. Analysts warned the stock could remain under pressure in the near term, as worries that a mutual fund could cut its holding in the company are keeping investors nervous.

The stock closed at ₹397.2, down 12.02%, and has now dropped 24% across nine sessions. Wednesday’s decline was its sharpest since December 2022. “The company had released a strong business update for the third quarter earlier this month, which led to a run-up in the stock price. However, promoter share pledging increased from 19% to 25% during the December quarter, which is likely to be a concern for shareholders, leading to some decline in the stock,” said Arijit Malakar, equity research analyst at Ashika Stock Broking.

Margin calls for retail and high net worth investors by brokerages contributed to the steep fall, said brokerage firm officials. Total traded quantity on Wednesday jumped to 26.52 lakh shares, compared with a two-week average of 4.57 lakh on BSE.

Technical indicators are pointing to further weakness, said analysts. “Kalyan Jewellers have been forming a pattern of lower tops and lower bottoms on the daily chart since January, indicating a sustained downtrend,” said Somil Mehta, head of retail research at Mirae Asset Sharekhan.

“In Wednesday’s session, the stock saw a sharp sell-off and closed below its previous swing low, further confirming weakness in price structure and bearish market sentiment.” Mehta said the overall trend remains negative and the stock is likely to extend its decline. Earlier this month, the company reported 42% year-on-year growth in consolidated revenue for the third quarter, a development that initially lifted the stock by around 4%.

Analysts recommend buying the stock only after it stabilises. “We advise investors to remain cautious at current levels and consider adding the stock only after the final third-quarter results are announced and the management provides greater clarity on the company’s outlook,” Malakar said. Mehta added that traders may watch for potential downside levels near Rs 350, followed by Rs 320, in the coming sessions.talk of MF cutting stake in jeweller Investors jitter over alarming.