Brightcom Group share price suspended; what should the 656,000 retail investors do?

Trading in the shares of this twenty-year-old company on the NSE and BSE has been suspended due to the company’s non-compliance with SEBI regulations.

Starting today, June 14, trading begins with Brightcom Group Trading in shares has been suspended on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) until the company complies with the NSE circular.

Before the suspension, Brightcom Group shares were trapped in a 5% lower price for two consecutive sessions on Wednesday and Thursday.

In May, the NSE sent a notice to Brightcom Group Ltd. regarding a possible suspension of trading, which raised concerns among shareholders and caused the stock to fall 28%.

The NSE issued a trading suspension notice on May 15 stating that trading in Brightcom Group shares would be suspended if the company did not announce its quarterly results for the second and third quarters of 2023-24 by June 11, 2024.

On May 16, Brightcom Group announced that it plans to release quarterly results by the deadline. However, so far, the company has only released the earnings report for the September quarter.

Trading in Brightcom Group shares will remain suspended for the next 15 days. After this period, trading in Category Z will resume on a trade-for-trade basis, but only on the first trading day of each week for the next six months.

A share in category “Z” is a share that does not meet the listing requirements of the stock exchanges, for which investor complaints have not been resolved and/or for which the necessary agreements have not been made with both depositaries.

The company’s shareholder structure for the third quarter shows that the founder held 18.38%, FIIs 10.70% and retail investors 70.76%.

In December last year, nine investment funds owned a 0.17 percent stake in the Brightcom Group. This share has now fallen to three funds with a 0.15 percent stake.

Brightcom Group Ltd is engaged in providing comprehensive online and digital marketing services to direct marketers, brand advertisers and marketing agencies.

The company provides digital marketing solutions to commercial agencies and online publishers worldwide.

On June 11, 2024, the company announced its financial results for the July-September quarter of fiscal year 2024. During this quarter, Brightcom Group’s revenue remained stable at ₹112 crore.

Net profit for the period increased slightly to Rs 6.3 million from Rs 5.9 million in the year-ago quarter, but profit margin declined to 0.9% from 3.47% a year ago.

Top investor Shankar Sharma held a 1.14% stake in Brightcom Group at the end of the March quarter. In addition to Sharma, 656,000 retail investors held shares in Brightcom Group as of March 31.

In February, Sharma and four others received relief from markets regulator SEBI in an alleged fund diversion case by Brightcom Group promoters. SEBI lifted the ban on Sharma selling his stake in the company after details of the transaction were disclosed.

On June 13, the last trading price of Brightcom Group Ltd was Rs 9.45, closing 5% lower. With a market capitalization of Rs 1,906 crore.

Written by Omkar Chitnis

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