This Rakesh Jhunjhunwala stock crashed 23% in just 3 days; know why, when, how

Between three months period of July to September this year, ace investor Rakesh Jhunjhunwala has reduced his holding in a company. This stock is in distress now.Some may even call it a smart move by Jhunjhunwala to shed some of his holding in it, however, that still does not make the investor impervious to the crash as he had not exited fully. Today, among many stocks, which the Dalal Street king holds, is Prakash Industries, which witnessed a massive bloodbath on stock exchanges. Prakash has been under Jhunjhunwala's ambit since the last three years now. Looks like this stock has turned into a not so good news for the ace investor and it just added itself on to the list of stocks on which he is losing hefty money this year. 

At around 1434 hours, Prakash Industries was trading at Rs 75.40, down by 7.43% on BSE. However, the company earmarked a new low of Rs 74.30 per piece resulting in overall decline of nearly 9%. 

What is interesting is that, this company has made Jhunjhunwala poorer by a whopping 23.40% as it was trading at Rs 97 on December 03, 2018. Simply put, Prakash has witnessed heavy selling pressure since past three days. 

If this was not enough, the company has in fact dropped by over 73% in one year's time. The company had only touched an all-time high of Rs 276 per piece on January 16, 2018. 

According to TrendLyne data, which tracks performances of Jhunjhunwala held stocks, the big bull of markets has lost hefty money in Prakash as the company has given him negative return of 42.53% in just 2018. 

Interestingly, Jhunjhunwala who every investor praises, must have noticed that there was not much left in Prakash, which is why he even trimmed his holding in this company by 0.06% between July to September 2018 quarter. 

Now Jhunjhunwala holds about 1.53% stake in Prakash with 2,500,000 equity shares which are worth Rs 20.4 crore. 

So why did Prakash lose its shine and is on hotbed? 

It all began on December 04, when a Economic Times report stated that, the Enforcement Directorate (ED) said it has attached assets worth over Rs 117 crore of a company in connection with its money laundering probe in the coal blocks allocation scam case. 

Reportedly it said that a provisional order for attachment of properties was issued by it under the Prevention of Money Laundering Act (PMLA) against Prakash Industries Limited. 

As the buzz circulated around investors, the share price of Prakash dropped almost immediately by more than 2%y. However, that negative trend was just the beginning of the free fall. 

Because bloodbath in Prakash was extended on December 05, where the company lost a massive 8.42% on Sensex, followed by another drop of 4.01% the very next day. 

It needs to be noted that, Prakash did rubbish the news which has stolen every faith of investors in the company. 

Prakash on December 05 replied to BSE when asked about the development saying, "We categorically state that we have not yet received any attachment order from Enforcement Directorate and that being so, the question of providing any further information to the exchanges does not arise in the matter. We, however, will inform the exchanges, if and when, we do receive any intimation in the matter."

Looks like, despite all the efforts Prakash made to restore investor faith, it has not succeeded. 

That said, if you have invested in Prakash just like Jhunjhunwala, then you too have lost plenty money.