Waaree Energies stock down 18% from 52-week high; Enters ASM stage 1

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Waaree Energies stock down 18% from 52-week high; Enters ASM stage 1

Solar energy in India has emerged as a key component of the country’s renewable energy strategy, driven by the government’s commitment to reduce carbon emissions and increase clean energy capacity. The Indian government has set ambitious targets, aiming to achieve 500 GW of renewable energy capacity by 2030, with solar playing a pivotal role.

Initiatives like the National Solar Mission and various incentives for solar power generation, including subsidies and tax benefits, are accelerating adoption. As a result, companies in the solar energy space, such as Adani Green Energy, Tata Power, and Waaree Energies, are benefiting from the growing demand for solar installations and infrastructure development. These stocks are seeing strong investor interest as India accelerates its shift toward sustainable energy solutions.

Crash from the Top

The company was listed on the Indian Stock Exchange on October 28, 2024, for Rs. 2,500. Eventually, the stock went on to rise to a high of Rs. 3,743, thereby generating a return of close to 50% in a matter of eight days. However, as the NIFTY 50 started correcting from the top and in just a matter of five days the stock ended up shedding a major chunk of its gain. The stock has seen a massive sell-off resulting in the stock correcting by close to 25%.

Share Price

Currently, the share price is trading at Rs. 2,840, reflecting a decline of 0.93% from the previous close of Rs. 2,870, indicating a dip in investor sentiment or market volatility.

What is the ASM Category

In the Indian stock market, ASM (Additional Surveillance Measure) is a set of measures imposed by the Securities and Exchange Board of India (SEBI) and stock exchanges to monitor and curb excessive volatility or unusual trading in stocks. Stocks are placed under ASM when there are concerns about price manipulation, abnormal price movements, or excessive speculation. The process helps maintain market integrity and investor protection.

Stages of ASM include:

1. Stage I: The stock faces additional monitoring, and its margin requirement is increased.

2. Stage II: Further restrictions, including higher margin requirements and a ban on intraday trading, are applied.

3. Stage III: The stock is subject to stricter surveillance, with short-selling and fresh positions being prohibited.

Types of ASM

Short-term ASM applies to stocks with abnormal price movements or high volatility over a brief period, with increased margins and trading restrictions. Long-term ASM targets stocks showing persistent irregular trading, imposing stricter surveillance and prolonged restrictions to curb speculation and ensure market stability and investor protection.

Tip: A stock typically enters the ASM category when there’s a significant rise in its price without any fundamental basis, often driven by speculation or market manipulation.

Stock enters ASM Category

Recently the shares of Waaree Energies Limited were added to the Short Term ASM(Additional Surveillance Measure) list. The stocks of the company were put under the Stage – 1 category which co-relates with additional monitoring and increased margin requirements for the stock.