Suzlon Energy shares fell to 5 percent, extending losses for the eighth straight session. The sharp decline of over 12 percent in a week follows an ‘advisory cum warning’ letter issued by BSE and National Stock Exchange (NSE) earlier this month.
This letter highlighted concerns regarding corporate governance practices after the resignation of independent director Marc Desaedeleer.
Stock exchanges emphasized that non-compliance with governance standards would be taken seriously moving forward. Suzlon Energy has, however, stated that this advisory does not materially impact its financial or operational activities.
Suzlon Energy's recent stock performance has raised concerns, as it has been trading below its 5-day, 10-day, 20-day, 30-day, and 50-day simple moving averages (SMAs). The Relative Strength Index (RSI) currently stands at 41.76, suggesting that the stock is nearing oversold territory, which is defined as an RSI below 30.
Analysts project that the share price could slip towards the Rs 68 level in the near term, indicating potential challenges ahead for investors.
This comes amid Nuvama Alternative Research's prediction of Suzlon Energy being classified as a large-cap stock by the Association of Mutual Funds in India (AMFI) starting February 2025.
Currently classified as mid-cap stocks based on a threshold of Rs 27,500 crore, the company is expected to meet the revised large-cap cut-off, which is projected to rise to around Rs 1 lakh crore from Rs 84,000 crore based on current average market-cap levels, the brokerage said.
Suzlon Energy did surpass the anticipated large-cap threshold with market capitalizations of Rs 1 lakh crore recently. However, post the recent correction, the market capitalization has dropped to Rs 97,075 crore.
Despite the reclassification, the Nuvama report suggested that this shift will not necessarily lead to fresh inflows in the stock, as active equity fund managers continuously monitor the AMFI list to adjust their positions in various fund categories accordingly.
At 11:50 am, shares of Suzlon Energy were trading 5 percent lower at Rs 70.93 on NSE. The stock has risen around 84 percent so far this year, outperforming benchmark Nifty's returns of 15 percent.
In the past 12 months, the counter has rallied more than 156 percent, more than doubling investors' money. In comparison, Nifty gained around 28 percent during this period.
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