Mumbai:Shares of Manpasand Beverages Ltd fell 20% on Monday to hit the lower circuit as investors spooked by the sudden exit of its statutory auditor close to its March quarter results dumped shares.
Deloitte Haskins & Sells quit as statutory auditor on Saturday, the beverage maker informed stock exchanges on Sunday, without assigning a reason for the same. The Manpasand board meet scheduled for 30 May to consider its March quarter earnings has been deferred.
Manpasand shares crashed as soon as they opened for trading to hit the 20% lower circuit filter, closing at down Rs86.20 in a day. This is the steepest single-day decline for the stock since listing on 9 July 2015.
It has slipped 32.6% from the record Rs511.82 touched on 15 September 2017. It gained 58.69% in 2017 but has lost 21.1% so far in this year. However, it is still up 115.5% from the issue price of Rs160 a share.
Kotak Institutional Equities which had a ‘buy’ rating on the company suspended its rating, citing lack of disclosure on reasons for Deloitte’s exit.
“More importantly, the company’s regulatory disclosure does not detail the reasons for the resignation. While the company’s board has appointed new auditors, we lack comfort on rating the company given the lack of disclosure on reasons for the resignation of the earlier auditors. We shall review our stance post the publication of the annual results (likely in first half of June) or the FY2018 annual report,” it said in a report on 28 May.
In the interim, the company has appointed Mehra Goel & Co to replace Deloitte.
“The board of directors of the company upon the recommendation of the audit committee, have appointed M/s. Mehra Goel & Co., chartered accountants, New Delhi as statutory auditor of the company with effect from 27 May 2018 to fill the casual vacancy in the office of statutory auditors, who shall hold office as such till the conclusion of the ensuring annual general meeting, subject to the approval of the members of the company,” it said in a statement to the BSE on 27 May.
Stating that the “it is in the best interests of our shareholders”, Manpasand Beverages said that everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation. The board meeting has been postponed and a new date will be announced shortly, the company said.
“This is just a minor hiccup and doesn’t represent any long term business impact. Manpasand Beverages has always focused on maintaining a sustained business growth. We still have a long way to go to achieve our high ambitions and we are well on our way,” said the company in a statement to BSE on 28 May.
Meanwhile, in an email response, Deloitte India said, “We are bound by confidentiality obligations and are unable to comment on client-specific matters.”