Indian internet and e-commerce conglomerate Infibeam which is one of the most important companies in the country has lost 71 percent of its market value on a single day after a WhatsApp message circulating among traders raised issues about the e-commerce company’s accounting practices.
The stock of the company collapsed as much as 73 percent before closing 71 percent lower at 58.45 rupees on Friday.
The WhatsApp message was sent a few months ago by an Equirus analyst to some clients. This was told by people familiar with the matter asking not to be revealed as they aren’t authorized to speak on the matter.
The fall in the valuation induced the company to make a voluntary clarification or explanation to the exchanges stating that there was no pending information or announcement that may impact its share price. The WhatsApp message declared that the company Infibeam had given interest-free and unsecured loans to its units.
According to the reports, the conglomerate gave unsecured, interest-free loans of Rs 135 crore ($18.6 million) to related firms for business operations as of March 31.
“The fact the shares were closely held with hardly any institutional ownership added to the weakness in the counter after the WhatsApp message,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd.
The company works on an e-commerce platform in the business-to-business and business-to-consumer space. Also, Equirus said the company’s e-commerce business was adding 1,500 merchants every month, with revenues growing 100 percent annually in the past five years.