Curious Case of Bombay Oxygen

With the Covid scare continuing, one of the themes which played out in the stock market by some market participants recently was that of scarcity of medical oxygen – Manufacturers and suppliers of the same would provide an opportunity to make quick bucks!!

While the stock price of all oxygen suppliers and manufacturers, viz. National Oxygen, Bhagwati Oxygen, Linde India, Gagan Gases moved up ranging from 17% to more than 100% in the last month, amongst these names, Bombay Oxygen Investments also was taken to fancy by participants and the stock price moved from approx. INR 10,301 per share on March 26, 2021 to its all-time high of INR 24,575 per share in less than 1 month.

Now, the stock is in a selling FREEZE!!

The interesting part was that the company had nothing to do with Oxygen since the last 2 years. The company’s business of manufacturing and supplying of industrial gases had been discontinued since 1^st August 2019. The company is now a Non-Banking Financial Company ‘NBFC’ and owns financial investments in the form of shares, mutual funds and financial securities. To know more about the company, please go to http://www.bomoxy.com/

This kind of asinine behaviour of the market participants prevailed even during the IT boom during 1997-1999, wherein multiple companies in order to ride the IT crest changed their names by adding suffixes or prefixes of either dot.com or Information Technology, etc. While many gullible participants did invest in some of these companies only to realize later that some of these them only had a bunch of computers primarily dedicated to do in-house accounting work. Their business was remotely connected to the world of Information Technology or Internet. After all, as writer and philosopher, George Santayana had aptly stated, “Those who cannot remember the past are condemned to repeat it.”

Couple of lessons:

• Reliance on Stock TIPS will have grave consequences mostly. If kids are supposed to do their homework, Shouldn’t You?

• You must always check the incentives which the Equity Advisor has? Has he also put in his hard-earned money in the HOT stock tips which he has rattled or is it something else?

• People are extremely confident about their investing skills and don’t necessarily want to take proper guidance. Ask someone about his driving skills!! He would always claim himself to be in the top quartile, despite having paid multiple fines or caused accidents. It was never his fault anyways!!

• Riding on the crest, while is adventurous, but often, it’s like being at the Cinderella’s ball and HOPE that you would be out of the party before the clock strikes 120’ clock. Best of luck with that!!

Disclaimer: Please note that these are my personal views. While I am NOT a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014, all investors are advised to conduct their own independent research into individual stocks or industries before making any decision. In addition, investors are advised that past stock performance is not indicative of future price action.