Shares of Polycab India bounced back 3% in morning trading on January 12th, regaining some ground after suffering a steep 21% single-day plunge the previous day. This sharp selloff was triggered by a statement from the company saying it had not yet received official written communication about the final determinations from a recent income tax department search across 50+ Polycab locations.
The tax raids, first reported on January 9th, had sparked worries amongst investors over potential tax evasion findings. As speculation grew but details remained unclear, Polycab’s stock price sank 27% over the period since the raids were announced. This hit represented the cable and wire manufacturing giant’s largest ever one-day decline amidst the unfolding tax investigation saga.
In an attempt to reassure markets, Polycab asserted that while post-search procedures will continue as tax authorities review materials seized, the company does not anticipate the final outcomes will “materially adversely impact its financial position.” With these clarifications issued, Polycab shares pared back some losses as the company aims to move past the uncertainty of the ongoing tax department probe.