The shares of the Bombay Oxygen Investments Ltd increased by 133% within one month as the investors started picking up stocks of the company, mistaking that it produces oxygen, demand for which has risen manifold.
Bombay Oxygen emerged as the unlikely winner in the mad rush to capitalise on oxygen scarcity as demand for the gas grew in the second wave of Covid19 cases began in February.
The investors started to pick up stocks of companies which manufacture oxygen to make profits as reports about scarcity of hospital beds, medicines and medical oxygen started pouring in from various parts of India in the month of April.
The investors continued to buy stocks of any company with ‘oxygen’ in their name, irrespective of whether the company manufactures the gas or not and Bombay Oxygen, a non-banking financial company, became the unlikely winner.
As per the website of Bombay Oxygen Investments Ltd, it was incorporated in 1960 as Bombay Oxygen Corporation Limited, a non-banking financial company, which no longer manufactures oxygen.
“The company’s primary business was manufacturing and supplying of industrial gases which has been discontinued from 1st August, 2019. The company owns substantial financial investments in the form of shares, mutual funds & other financial securities and the income from such financial investments is the source of revenue of the company,” according to the website of Bombay Oxygen.
According to a media report, the company’s shares increased from a closing price of Rs 11,025 on March 31 to Rs 25,500 intra-day on April 20 on the Bombay Stock Exchange (BSE).
This is a whopping 131.3% gain within a month. The rally in share price is even higher if its price on February 1 is taken into consideration, said the report.
The report said on February 1, the stock was trading at Rs 9,964.95, gaining nearly 156% in less than 3 months.
The movement in stock price made BSE to seek clarification from Bombay Oxygen on April 8.
In reply, Bombay Oxygen said: “…we wish to inform you that all the material information/announcement that may have bearing on the operations/ performance of the company which include all the necessary disclosures in accordance with Regulation 30 of SEBI Regulations, 2015 and under insider trading regulation, have always been disclosed by the company within the stipulated time. There is no pending information or announcement which may have a bearing on the price movement of the company.”