Ad-tech firm Brightcom Group Ltd on Friday informed exchanges about market regulator SEBI's showcause notice. The regulator made certain key observations, the company said, which were on the impairment charges in its balance sheet for FY20 amounting to Rs 868.30 crore, shareholding pattern, compliance and reporting, among others.
"The company had taken impairment charges in its balance sheet for FY 2020, amounting to Rs 868.30 crore. The SEBI has observed that, as per accounting standards, these charges should have been taken through the P&L (profit and loss) statement, not through the balance sheet, and that by taking the said (non-cash) charges not through the P&L, the profits for that period have been overstated," Brightcom stated.
SEBI has also made observations that the shareholding pattern of the promoter holdings in the said period, was not rightly reported, it mentioned. There are other observations on compliance and reporting done by the company, Brightcom added.
The company, in its response, said legal advice is sought with respect to the overall matter.
It also said that the company and its key officials would respond to the SEBI showcause notice, about its reasons for treating the impairment charges in a particular manner, as well as on the other issues raised by SEBI.
"The company also welcomes this opportunity to strengthen its compliance, accounting and disclosure standards," Brightcom added.
Once considered a multibagger, the company's scrip has plunged 82.86 per cent in a year and 47.10 per cent on a year-to-date (YTD) basis. That said, in the past five years, the counter, which is backed by seasoned investor Shankar Sharma, has surged 576.32 per cent. As of December 2022, Sharma owns a 1.24 per cent stake in the company.
The stock traded lower than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 37.39. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 595.36. It has a price-to-book (P/B) value of 1.99.
Brightcom has a one-year beta of 0.99, indicating average volatility, as per Trendlyne. The counter settled 5 per cent lower at Rs 15.42 on Thursday.
The group consolidates ad-tech, new media and IoT (Internet of Things) based businesses across the globe, primarily in the digital eco-system. Brightcom's consumer products division is focused on IoT. The company has a presence in the US, Israel, Latin America ME, Western Europe and Asia Pacific regions.
Meanwhile, Indian equity benchmarks were closed today to mark the birth anniversary of Dr BR Ambedkar. Yesterday, the 30-share benchmark BSE Sensex pack edged 38 points, or 0.06 per cent, higher to settle at 60,431, while the broader NSE Nifty index closed 16 points, or 0.09 per cent, up at 17,828.
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