PC Jeweller plunges 10% after exchanges place stock under short-term ASM framework

Mint

5 days ago

Shares of smallcap multibagger stock PC Jeweller came under intense selling pressure on Tuesday, July 8, sliding as much as 10 percent to ₹ 16.85 after both the BSE and NSE placed the stock under the short-term Additional Surveillance Measure (ASM) framework. The move comes on the back of a rapid surge in the company's share price in recent trading sessions, prompting regulatory scrutiny.
The sharp drop follows a strong two-day rally in which the stock gained up to 33 percent, touching an all-time high of ₹ 19.65 in the previous session. However, Tuesday's fall erased a portion of those gains, reminding investors of the volatility that often accompanies such speculative rallies.
According to exchange mechanisms, the ASM framework is used to curb excessive speculation and ensure market stability. When a stock is placed under short-term ASM, it typically means that regulators have identified unusual price movements, volume spikes, or excessive volatility. Although the BSE and NSE do not disclose specific triggers for such actions, the recent explosive rally in PC Jeweller, combined with its consistently high trading volumes, likely contributed to this intervention.
The ASM framework imposes certain trading restrictions aimed at discouraging short-term speculative activity. These include a 100 percent margin requirement, which prevents investors from using leverage to take positions in the stock. Additionally, the stock enters trade-for-trade settlement, meaning intraday trades are not allowed, and all transactions must result in delivery. This tends to reduce liquidity and discourage momentum-driven trades, leading to a temporary cooling-off period in the stock.
For PC Jeweller, the impact of this action was felt immediately, with investor sentiment turning cautious. The stock tumbled in early trade, reacting not only to the ASM notification but also to the elevated valuations following its recent price run-up. Such surveillance measures often lead to profit booking as traders exit positions to avoid getting caught in illiquid trades.
Despite Tuesday's decline, PC Jeweller has delivered multibagger returns over the past year, soaring 266 percent from its 52-week low of ₹ 5.34, hit in July 2024. Even in July 2025 alone, the scrip has gained 39 percent, rebounding strongly from a 1.6 percent dip in June. Earlier, it rose 2.4 percent in May, though it fell 6.4 percent in April, showing a volatile but largely bullish trajectory over the past several months. Prior to that, the smallcap stock rose 15.5 percent in March after posting sharp declines of 21.7 percent in February and 9 percent in January, reflecting a volatile but overall bullish trajectory.
Adding to the flurry of developments, PC Jeweller announced via exchange filing that its Board of Directors will meet on Thursday, July 10, 2025, to consider and approve a proposal for fundraising through a preferential allotment of securities. The fundraising plan is subject to regulatory, shareholder, and statutory approvals, with final pricing yet to be determined.
This comes on the heels of a robust Q1FY26 business update from the company. Last week, PC Jeweller disclosed that its standalone revenue surged approximately 80 percent year-on-year for the April–June quarter, marking one of its strongest quarterly performances in recent history. The company attributed the stellar performance to strong demand during the wedding and festive season, coupled with continued customer trust and brand goodwill.
The management noted that despite volatility in gold prices, consumer demand remained resilient, helping the company grow its top line substantially. Additionally, PC Jeweller highlighted its efforts toward financial deleveraging, having cut its outstanding debt to bankers by more than 50 percent during FY24–25. In the first quarter of FY26 alone, it further reduced debt by 7.5 percent, reinforcing its commitment to becoming debt-free by the end of FY26.
'The company continues to revamp and strengthen all aspects of its operations, the results of which are visible in its financials,' said the management in its recent filing. It added that it remains confident of 'delivering exceptional performance in the upcoming quarters as well.'
While the company's growth momentum and operational turnaround are generating optimism among investors, Tuesday's stock price action serves as a reminder that sharp rallies in small-cap counters often invite regulatory attention. The short-term ASM action, while not indicating any fundamental wrongdoing, does impose cautionary boundaries for investors and traders.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.