Educomp has been falling from highs of over 1000 before 2008 to below 50 at current levels.



I am sure everyone is wondering why such a big fall? Below are few major reasons that i can think of
  • 55% of Promoter Stake is Pledged. It was the same case with Satyam. This i believe is the single most reason for such a fall. Always, stay away from a company whose promoter stake is pledged.
  • Debt of over 300 Crores. Debt is always a bad thing. More so, when coupled with a promoter stake pledged.
  • Profits have dipped over the years and run into losses in FY-2013.

Just stay away from such companies. Never try to get into such stocks. Believe me, there are much better investor friendly stocks to invest your hard earned money in.

Watch the Below video to understand how to check whether promoter stake is pledged.