Shares of Ramkrishna Forgings Ltd plunged up to 10% on Monday, 28 April, after the business identified inventory inconsistencies.

The corporation has also approved the recruitment of a reputable independent external agency to perform joint fact-finding research into the inventory anomalies and the causes behind them.

These discrepancies were uncovered during the company’s annual physical inventory audit for the fiscal year that ended 31 March. The verification exercise began on 6 April.

In its regulatory filing, the company said, “While the physical verification process is continuing as per the internal estimates of the company, a likely adverse impact of the order of 4% to 5% of the net worth of the company is indicated.”

On a one-time basis, the firm will account for the impact in its financial statements based on the final joint report by independent external agencies, according to the statement.

Ramkrishna Forgings has also stated in its exchange filing that the possible unfavourable impact may increase following the fact-finding study on the company’s net worth. The management emphasized that this was the first event of its kind in the company’s history and restated the promoters’ commitment to protecting and preserving stakeholder interests.

Promoters of the company have also assured investors that they intend to fund any potential adverse impact through permissible instruments after the conclusion of the fact-finding study.

At 11:52 am, the shares of Ramkrishna Forgings were trading 3.535 lower at Rs 633.50 on NSE.

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