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The stock price increased from Rs 3.6 to Rs 1190 because of very low free float market capitalization of the stock. Free float market capitalization is the non-promoter stake in the company. In case of Ruchi Soya, free float market capitalization decreased from 42.72% (282 Million Shares) to 1.10% (3.26 Million Shares). Therefore, trading volume decreased drastically or less no of stocks are available for trading.
The stock price will decrease, If the promoters decide to reduce their stake in the company. This sharp increase in stock price due to low volumes increased the mcap of the company to Rs 35,000 Crore. The valuation of the company is 50% more than HUL and twice that of Marico. As an investor you should consider fundamentals for investment.
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