PG Electroplast shares surge 5% after exiting the F&O ban — Here’s what it means

Shares of consumer durables manufacturer PG Electroplast Ltd. gained as much as 5% in early trading on Wednesday, August 20, as they have exited the Futures & Options (F&O) ban.The stock had been in the F&O ban since August 12.

Exiting the F&O ban means that new positions can be created again in the stock, which is not a possibility when the stock is in the ban.

A stock exits the F&O ban when its open positions fall below 80% of the market-wide position limit (MWPL), which refers to the maximum permissible number of open derivative contracts that can be held by all market participants for a particular stock.Shares of PG Electroplast have gained 5% in the five trading sessions that they have been in the F&O ban. The 6% fall on August 13 was offset by a 8% advance on Monday, August 18, when all consumer durable stocks, including Voltas, Blue Star, IFB Industries, rallied in anticipation of GST rates being rationalised to a lower level before Diwali.

PG Electroplast shares fell more than 30% across two trading sessions between August 8 and August 11 after it sharply cut its full-year guidance across parameters, from profitability to its core business vertical.

In an interaction with CNBC-TV18 after the results, Vikas Gupta of PG Electroplast mentioned that the long-term outlook of the business remains intact, and that he currently does not see any downside risk to the revised guidance. He expects normalised inventory levels by October and November this year.

Shares of PG Electroplast are trading 4.7% higher on Wednesday at ₹565.8. The stock is up for the fourth straight day.