After the raids of Income Tax Department (IT Raids), there is a huge fall in the shares of Polycab India. The stock fell more than 20% on Thursday.
The Income Tax Department had conducted a raid against Polycab Group on Wednesday. The IT department detected cash sales of around Rs 1,000 crore. The Finance Ministry said in a statement that apart from cash sales of about Rs 1,000 crore, evidence has also been found of undisclosed cash payments of Rs 400 crore, which were made by the distributor on behalf of the flagship company.
Polycab Group suspected of income tax evasion
The Income Tax Department has identified such non-actual expenses which amount to Rs 100 crore. Additionally, it was alleged that the company inflated the purchase account through authorized distributors to Rs 500 crore.
Evidence from the Income Tax Department shows that the group had committed tax evasion. There was also connivance of some authorized distributors in this. The Income Tax Department took this action in Delhi, Mumbai, Pune, Aurangabad, Nashik, Daman and Halol. Polycab denied reports of tax evasion. The company said in an exchange filing on Wednesday that it has not received any information from the Income Tax Department regarding the outcome of the search.
The stock had slipped to Rs 3,929.50 on Thursday, hitting the lower circuit of 20%, which is the lowest level since July 18, 2023. There has been an increase of 47.11% in the last 12 months. According to Bloomberg data, out of 31 analysts tracking the company, 19 have given ‘BUY’ rating, 6 have advised ‘HOLD’ and 6 have advised ‘SELL’.
