A wave of negative news in a falling market is deepening investor anxiety, say market participants. Several stocks, including Gensol Engineering, Jai Corp, Kalyan Jewellers, AGS Transact Technologies, Suumaya Industries, LS Industries and, most recently, IndusInd Bank, have come under pressure due to controversies, triggering selloffs as nervous investors cut losses.
With regulatory scrutiny, corporate governance lapses and company-specific issues in focus, market sentiment remains fragile. Even minor setbacks are leading to sharp stock price declines amid heightened caution. IndusInd Bank last week disclosed discrepancies in its derivatives portfolio, potentially leaving a Rs 1,600-crore hole in its balance sheet. The stock tumbled nearly 27% on one day and 30% over the week. Gensol Engineering has plunged 56% in the past month.
This follows a ratings downgrade by Icra, which alleged the clean energy firm falsified debt-servicing documents. Sentiment worsened after its promoters sold shares in the open market during the crisis. The stock had shot up 2,600% between 2022 and 2024.
“Retail investor confidence has already been weak due to the market correction. Emergence of some news related to certain companies and recent listings, especially concerning governance standards, has contributed to this decline in confidence,” said Nishit Master, portfolio manager at Axis Securities. “Such dynamics are often observed in bull markets, where companies might operate with less oversight, but market corrections tend to bring these issues to light.”
Investors also lost money in AGS Transact, after the ATM service provider defaulted on dues. Credit ratings firms such as Crisil and India Ratings downgraded the cash machine provider, singling a high risk of default on debt payments. The stock has plunged 62% in the past month and 84% in the last three years.
Earlier this month, the Central Bureau of Investigation booked Jai Corp, its promoter-director Anand Jain and others in a cheating and fraud case based on a directive by the Bombay High Court. The Jai Corp stock has declined 76% in the last three months.
“Retail investors are increasingly experiencing heightened anxiety, not merely due to specific events that have unfolded in certain stocks, but more so because of the broad-based decline in prices across the market,” said Sahil Shah, managing director and chief investment officer of Equirus. “Individual stock-related developments have certainly influenced investor sentiment. Many of these stock-specific occurrences have transpired during the market's overall decline, rather than being the initial trigger.”
Kalyan Jewellers’ shares have declined 42% over the past three months amid rumours of Income Tax Department raids, an FIR and allegations of bribing fund managers. The company has strongly denied all these allegations.
As for Suumaya Industries and LS Industries, the market regulator barred its promoters from the stock market.
According to Master of Axis Securities, it becomes particularly important for investors to prioritise the fundamentals of a company, especially when considering small and mid-cap investments. “For those who may not have the time or expertise to thoroughly assess a company’s fundamental strength, collaborating with trusted advisors or skilled fund managers can offer valuable support in managing their portfolios,” he added.
With regulatory scrutiny, corporate governance lapses and company-specific issues in focus, market sentiment remains fragile. Even minor setbacks are leading to sharp stock price declines amid heightened caution. IndusInd Bank last week disclosed discrepancies in its derivatives portfolio, potentially leaving a Rs 1,600-crore hole in its balance sheet. The stock tumbled nearly 27% on one day and 30% over the week. Gensol Engineering has plunged 56% in the past month.
This follows a ratings downgrade by Icra, which alleged the clean energy firm falsified debt-servicing documents. Sentiment worsened after its promoters sold shares in the open market during the crisis. The stock had shot up 2,600% between 2022 and 2024.
“Retail investor confidence has already been weak due to the market correction. Emergence of some news related to certain companies and recent listings, especially concerning governance standards, has contributed to this decline in confidence,” said Nishit Master, portfolio manager at Axis Securities. “Such dynamics are often observed in bull markets, where companies might operate with less oversight, but market corrections tend to bring these issues to light.”
Investors also lost money in AGS Transact, after the ATM service provider defaulted on dues. Credit ratings firms such as Crisil and India Ratings downgraded the cash machine provider, singling a high risk of default on debt payments. The stock has plunged 62% in the past month and 84% in the last three years.
Earlier this month, the Central Bureau of Investigation booked Jai Corp, its promoter-director Anand Jain and others in a cheating and fraud case based on a directive by the Bombay High Court. The Jai Corp stock has declined 76% in the last three months.
“Retail investors are increasingly experiencing heightened anxiety, not merely due to specific events that have unfolded in certain stocks, but more so because of the broad-based decline in prices across the market,” said Sahil Shah, managing director and chief investment officer of Equirus. “Individual stock-related developments have certainly influenced investor sentiment. Many of these stock-specific occurrences have transpired during the market's overall decline, rather than being the initial trigger.”
Kalyan Jewellers’ shares have declined 42% over the past three months amid rumours of Income Tax Department raids, an FIR and allegations of bribing fund managers. The company has strongly denied all these allegations.
As for Suumaya Industries and LS Industries, the market regulator barred its promoters from the stock market.
According to Master of Axis Securities, it becomes particularly important for investors to prioritise the fundamentals of a company, especially when considering small and mid-cap investments. “For those who may not have the time or expertise to thoroughly assess a company’s fundamental strength, collaborating with trusted advisors or skilled fund managers can offer valuable support in managing their portfolios,” he added.
