Ever since the category was created on January 16, 2002, I have never looked at Z-group companies. These are companies that the Bombay Stock Exchange indicates are to be avoided like the plague, bottom of the investment barrel. A company gets the Z-halo if it violates three of seven listing criteria --- giving notice of book closure and record dates, submitting its annual report, submitting quarterly shareholding pattern, paying listing fees, publishing quarterly results, redressing investor complaints and implementing corporate governance practices.
So, what’s a company like National Mineral Development Corporation (NMDC) doing in a category like Z-group? A state-owned mining major, NMDC’s share price in 12 trading sessions has risen almost 70 per cent. Nothing shocking about that --- Z-group companies are known to be illiquid, with little or no investor interest, and thus ripe for manipulators, particularly in rising markets (in falling markets they crash, in indifferent markets they remain invisible).
Opinion in The Indian Express, July 21, 2007