Shares of PC Jeweller experienced a sharp decline of approximately 10% on Tuesday, July 8, 2025, after both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) placed the stock under the additional surveillance measure (ASM) framework. The stock plunged to an intraday low of ₹16.83. This move by the exchanges is aimed at curbing abnormal trading activity and maintaining orderly market conditions.
The decision to put PC Jeweller under surveillance follows a period of rapid gains in the company's share price. In the two trading sessions prior to the decline, the stock had rallied by as much as 33%, reaching a 52-week high of ₹19.65. This sudden surge prompted regulatory scrutiny, leading to the imposition of the ASM framework.
The ASM framework is a mechanism used by exchanges to monitor and regulate stocks that exhibit unusual price movements, volume spikes, or excessive volatility. It is designed to protect investors byDiscouraging speculative activity and ensuring market stability. While the exchanges do not disclose the specific triggers for placing a stock under ASM, the recent explosive rally in PC Jeweller, combined with consistently high trading volumes, likely contributed to the decision.
Under the ASM framework, certain trading restrictions are imposed to discourage short-term speculative activity. These restrictions may include:
The imposition of the ASM framework had an immediate impact on PC Jeweller's stock, with investor sentiment turning cautious. The stock tumbled in early trade, reacting not only to the ASM notification but also to the elevated valuations following its recent price run-up.
It's important to note that being placed under ASM does not necessarily indicate financial weakness or operational problems for the company. Instead, it signifies that the stock will be subject to closer regulatory scrutiny, which may involve adjustments to margin requirements or restrictions in trading bands. These measures are typically temporary and are reviewed regularly.
Despite the recent decline, PC Jeweller's stock has delivered a multi-fold return of over 250% from its 52-week low of ₹5.34 in July 2024. The company's board is scheduled to meet on July 10, 2025, to consider and approve a proposal for fundraising through a preferential allotment of securities. This fundraising plan is subject to regulatory, shareholder, and statutory approvals, with the final pricing yet to be determined.
