I personally had brought many shares of Shrenuj , the 110 years old diamond company at price band of Rs.4 to Rs.5. The Shares of Shrenuj which was previously oversold because of the decrease in margin and losses was increasing daily at a rate of 5% upper circuit.The share price went up to the levels of 6.60.Previously it had fallen to the levels of Rs.2 and was increasing continuously then.In this article, we will tell about shrenuj share price target considering the market situation which might come going forward.
Then all of a sudden one day a bad news came.I was not aware of that.By the time I had seen the news it was too late. The news was out the previous day at night. Those who knew the news sold it immediately at market opening and booked 3 times profit(as you can see the price went up from 2 to 6.60).The shares of Shrenuj even hit upper circuit that day because there were many who were not aware of the bad news and they were buying.By the time everyone came to know about the news, it was too late as there were no buyers, only sellers.It took the share prices to the lower circuit within a few minutes.
The news was banks repossessed the diamond inventory of Shrenuj as it had failed to pay the loans for more than a quarter. ICICI Bank went to the debt recovery Tribunal to get this order passed.The promoters of the company, the father and son duo were asked by the court not to leave the country without the permission of the court.They were asked to bring in 300 cr rupees in order to restructure the debt.The news came on economic times .
The share price of shrenuj started falling at a same rate as it was increasing from next day onwards.It again came back to the levels of Rs.2 without giving the sellers a chance to exit as there were only sellers with no buyer.I continue to hold it without selling it. In fact, I bought some more at the levels of Rs.2.
The diamond industry is facing a slowdown. Shrenuj is one of the largest company in the diamond industry. It has diversified business model.They have international reach.They do business in the US and many other countries with different brand names. Shrenuj used to be a big company with good reputation. But recently the diamond sector slowed down.
The price of unpolished and polished diamonds became almost same leading to the trouble faced by the company.The margin declined.They had to sell the diamonds at a price same as that of raw diamonds. What they usually do is they procure the raw diamonds at a cheaper price, polish it and sell it at a higher price.But due to their ultra sharp margin, they had to sell the diamonds at a lower price leading to losses.On top of that recently the sales also declined.
The company is genuine as banks had failed to find any evidence of fund diversion. The company is facing genuine problems because of the bad market situation.
Although it will be a total gamble but if somehow the market condition changes and the diamond industry come in limelight again then there is a big chance that this company will revive.If the diamond prices again rise then the company will most probably pay 300cr to get back the diamond inventory to start their business again.And if that happens then you most probably know the returns.So Shrenuj share price target could be anything if the market condition changes and the company go in the direction of growth in coming years.
So it is up to you as your risk taking ability to buy the shares of Shrenuj.Remember it is a total gamble as no one can say how and when the diamond industry will recover.But if it does then this reputed company will thrive which is 110 years old and is being run for four generations. And the shares can give extraordinary returns.So let’s hope the company shines bright like a diamond in future.