Unusual trades in Tulip IT on debut

Mumbai, Jan 5 | Updated: Jan 6 2006, 06:23am hrs
Tulip IT Services witnessed an abnormal trade on the day of its debut on the stock exchanges when 4,04,800 shares changed hands on the Bombay Stock Exchange at 25 paise per share at 2.24 pm. The shares had opened at Rs 180 against the issue price of Rs 120 per share. The share price hit a high of Rs 201.40.

At the time of going to press, BSE officials were still in a closed-door meeting and were yet to decide if the unusual trade should be invalidated, an official said. He said, whatever decision is taken at the meeting will have to be ratified by Sebi before making it public.

The stock exchanges have the authority to reverse a trade under certain conditions. Such abnormal trading can happen only on the first day of trading in any stock as intra-day circuit filters are not applied on the first day of listing. This allows bidders to quote any price.

In another incident at about the same time, 5,95,580 shares traded at Rs 100, below the issue price of Rs 120, when the stock was trading at Rs 187.1. The value of trades made at 25 paise amounted to Rs 101,200 and at the market price of Rs 187.1, the trades would have been valued at Rs 7.57 crore. The Tulip stock ended the day at Rs 182.55 on the BSE, up 52% over its issue price.

Some dealers said it was a case of punching error due to mistyping the number on the dealing screen. On the NSE, the stock had opened at Rs 150, and never traded below that price on Thursday.