Market Jitters or Misunderstandings: The Queer Case of JP Associates Ltd (Rs.8.74) and MEP Infrastructure Ltd (Rs.8)...

In recent times, it appears that some traders are eager to exit scrips that have been placed under restricted trade by the exchanges. This behavior tends to create a ripple effect, influencing the mindset of other investors who may start to believe that something significantly negative is unfolding. Photo: Dreamstime.

I feel that many investors, are not familiar with the basic operations of the NCLT (National Company Law Tribunal) and the NCLAT (National Company Law Appellate Tribunal), and this seem to harbor misconceptions about the functioning of these two organisations. There’s a prevailing assumption that once a company is linked with NCLT, it signals the onset of the company’s demise or it is bankrupt.

The situation is exacerbated by the role of Hindi vernacular papers, which are notorious for stoking emotions on both ends of the spectrum. They frequently equate a company's entry into NCLT with व्यवसाय का दिवालियापन (business bankruptcy), which is a misleading interpretation.

Meanwhile, market operators seize this opportunity to manipulate investor sentiment through various WhatsApp and Telegram groups, playing mind games that can sway public perception. Off late we've witnessed this phenomenon across multiple scrips.

Unfortunately, the toothless SEBI looks the other way around while the operators continue with their games in various WhatsApp and Telegram groups.