Kalyan shares fall the most in three years as share selloff fears spook investors

Mumbai: Shares of Kalyan Jewelers extended their decline for the ninth straight session on Wednesday, falling over 12% in their steepest single-day decline in three years. Analysts warned the stock could remain under pressure in the near term as concerns that a mutual fund could cut its stake in the company keep investors nervous. The stock closed at ₹397.2, down 12.02%, and is now down 24% in nine sessions. Wednesday’s decline was the sharpest since December 2022. “The company had released a strong third-quarter business update earlier this month, leading to a rise in share price. However, promoter share commitments rose from 19% to 25% during the December quarter, which is likely to be a concern for shareholders, leading to some fall in shares,” said Arijit Malakar, equity research analyst at Ashika Stock Broking.

Margin calls for retail and high-net-worth investors by brokers contributed to the steep decline, brokerage firm officials said. The total traded volume rose to 26.52 lakh shares on Wednesday, compared to a two-week average of 4.57 lakh on BSE.

Technical indicators point to further weakness, analysts said. “Kalyan Jewelers have been forming a pattern of lower highs and lower lows on the daily chart since January, indicating a continued downtrend,” said Somil Mehta, head of retail research at Mirae Asset Sharekhan.

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

Analysts recommend buying the stock only after it has stabilized. “We advise investors to remain cautious at current levels and consider adding to the stock only after the final third quarter results are announced and management provides more clarity on the company’s prospects,” Malakar said. Mehta added that in the coming sessions, traders can look for potential downside levels near Rs 350, followed by Rs 320. Talk of MF cut in stake in jeweler Investors are getting jittery with fear.