Gammon scrip makes a comeback, ends in the green (Lead)

July 13th, 2009 - 6:56 pm ICT by IANS  

Mumbai, July 13 (IANS) The shares of infrastructure major Gammon India, which took a beating Monday as authorities mulled action against the company, pulled back smartly to end the day in the green.
Gammon’s scrip had plummeted 17.49 percent to Rs.133 soon after opening, compared to Friday’s close at Rs.161.20, after the company’s came under a cloud following the collapse Sunday of a viaduct it was building for the Delhi Metro killing six people.

The government and Delhi Metro Rail Corp said action would be taken against the contractor if found guilty.

The scrip, however, bounced back, ending the day up 2.73 percent at Rs.165.60.

The comeback can be attributed to a lot of positions being built up during the day and investors choosing to settle them by the end of trading.

“A lot of short positions seem to have been built on Gammon’s scrip. People were just squaring them off, resulting in the surge,” said SMC Capitals equity head Jagannadham Thunuguntla.

The shares of Gammon Infrastructure, another listed firm in which the group has majority stake, managed to close above the day’s lows.

Trading on the stock had been suspended for a couple of hours after it hit the lower circuit filter of Rs.118.45. It closed Monday at Rs.120.50, 3.33 percent down from Friday’s close of Rs.124.65.

The reinforced concrete viaduct that collapsed Sunday due to cracks in one of the supporting pillars is meant to carry the elevated rail tracks on which the Metro trains will move.

The Gammon group has been facing flak for a similar accident in 2007, when a flyover in Hyderabad collapsed killing two people.

The committee appointed by the Andhra Pradesh government had found Gammon to have been negligent in the Punjagutta flyover mishap case.

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