Shares of Sigachi Industries Ltd., a pharmaceutical sector company, witnessed a sudden and significant decline on Monday. The market reacted with alarm to news of an explosion at one of the company's units in the Sangareddy district of Telangana, which directly impacted the stock price. The company's shares fell by approximately 14 percent on the BSE on Monday.
Within hours of the market opening, Sigachi Industries' stock plunged, reaching as low as 48.82 rupees, reflecting an 11.53 percent decrease compared to the previous trading session. The stock traded around this level until 3 p.m. Investors were also concerned that the company's shares had fallen by about 32 percent from the 52-week high of 69.89 rupees, achieved on August 1, 2024.
Accident at Telangana Unit, Eight Deaths Reported
According to reports, a powerful explosion occurred on Monday morning at the Sigachi Industries factory located in the Pashamylaram Industrial Area of the Sangareddy district in Telangana. The incident was so severe that initial reports confirmed eight fatalities and several injuries. There were also concerns about several workers being trapped inside the unit at the time of the accident, prompting a rescue operation.
Fire brigade and police teams immediately arrived at the scene. Fire engines were called in to control the fire. Local authorities stated that the rescue operation was proceeding swiftly, and injured employees were admitted to nearby hospitals. Some of them remain in critical condition.
Mystery Surrounds the Cause of the Explosion
Preliminary investigations by the police suggest that the incident was a possible explosion. However, the exact cause of the explosion has not yet been determined. Investigations are underway to consider all possibilities, including the disregard of safety standards, gas leaks, or technical malfunctions in the machinery.
A police officer stated that based on the condition of the site, it appeared to be an explosion, although a definitive conclusion could only be reached after the forensic team's report.
Questions Raised About Employee Safety
This event has once again raised questions about the safety measures for employees in pharmaceutical units and manufacturing plants. There have been several previous incidents in the Pashamylaram Industrial Zone, but such serious events make it clear that there is often a lack of strict adherence to safety regulations.
Local labor organizations and social organizations have expressed their displeasure over the accident and have demanded that the administration provide better treatment to the injured and immediate compensation to the affected families. They also demanded strict action against those responsible.
Uncertainty Prevails in the Market
The news of the accident caused a wave of anxiety among investors in the stock market on Monday. Concerns were particularly evident among investors in the pharmaceutical sector regarding Sigachi Industries. A significant decline in the company's stock was recorded during the early trading hours.
Brokerage experts believe that uncertainty will persist regarding this stock in the market until complete information about the accident is available and an official statement is released by the company. While the company's fundamentals have remained b for a long time, such accidents create a negative sentiment in the short term.
Impact on the Market
The impact of Sigachi Industries was also visible in other parts of the market. On Monday, the Sensex also fell by around 459 points, reaching a level of 83,599.24. Although other global factors were also responsible for this decline, the fall in midcap stocks like Sigachi put pressure on the midcap index.
Company's Performance to Date
Sigachi Industries is a pharmaceutical excipient manufacturing company that primarily produces microcrystalline cellulose (MCC). It is considered one of the leading MCC-producing companies in India. The company has production units in Telangana and Gujarat.
The company's shares performed well over the past year, and its stock reached a high of 69.89 rupees on August 1, 2024. However, due to recent events, investors have suffered losses, and the stock has now fallen by about 32 percent.
No Official Statement from the Company
Despite several hours passing since the incident, no official press release or statement has been issued by Sigachi Industries. Investors are awaiting clarification and future action plans from the company. Market experts believe that the company must clarify the situation soon to alleviate the instability in the market.
Investigation and Rescue Operation Ongoing
Teams from local administration and the Industrial Safety Department have begun inspecting the factory. The site has been sealed for the time being, and all chemicals and equipment are being examined. In addition, a safety alert has been issued in several units around the factory to prevent any further incidents.
