Shares of Ashish Kacholia-backed Balu Forge surge 13% after sharp YTD decline

Shares of top investor Ashish Kacholia-backed Balu Forge Industries rallied as much as 13% intraday on Tuesday, following a sharp fall of around 27% in the past six sessions, following the company’s clarification on the conclusion of a recent Income Tax department probe.

In an exchange filing, Balu Forge said that the search operation conducted by the Income Tax department has been completed, and the company asserted that no incriminating documents or unaccounted assets were found during the process.

It also clarified that the company’s business operations were not affected and production continued as usual throughout the discovery period.

The recovery in the share price comes as a relief to investors, especially considering that Ashish Kacholia, one of the most prominent names in the Indian equity market, owns a stake in the company.

As per the most recent shareholding pattern, Ashish Kacholia holds 18,65,933 shares in the company, representing 1.64% equity stake.

The stock had come under pressure in the previous week amid overall negative broader market sentiment.

Technical indicators are already pointing to an oversold condition with the Relative Strength Index (RSI) slipping below 30, which is being interpreted by traders as a sign of a potential rebound.

With Tuesday’s rally, the stock appears to be making a comeback from its recent lows. Market participants are now likely to watch closely to see if the uptrend is sustained as the uncertainty surrounding the tax finding has dissipated.

As of 12.13 pm, shares of Balu Forge on the BSE rose 11.7% to Rs. was trading at 492.95.

In the past one year, shares of Balu Forge have declined by 23.37%, indicating sustained pressure over a longer period. Year-to-date, the stock is down 17.92%, indicating that the weakness has carried over into the current year.

The sell-off has been more intense in the medium term, with the stock down 26.04% in the last six months and 24.64% in the last three months. Recently, the downtrend has intensified, as the stock has fallen 22.60% in the past one month, underscoring the continued bearish sentiment around the counter.

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