Is there any special pre open session for investment companies like vhl, kicl, elcid etc. because their prices are still not discovered yet in pre open and orders are still pending.
I think @Aditya_Gupta is referring to periodic call action mechanism.
What is periodic call auction and why are some stocks traded in this category?
As a concept this is correct but there are nuances to why price discovery is not happening in this investment companies.
Problem is their intrinsic value is very high, but last traded price is very low. And due to circuit filter a trade will never happen, and so no price discovery.
Hence Sebi introduce this special call auction.
Yes, there is a special trading session for these investment companies.
It’s not the usual pre-open session, but a special call auction announced by the exchanges.
This session is meant to help find a fair market price because these stocks are very illiquid and often don’t trade or discover a price in regular sessions.
There are no price bands, and if the auction doesn’t succeed on the first day, it continues the next day until the price is discovered. So there are still companies whose price is not discovered going through the special trading session.
I am attaching the NSE circular link with attachment
Annexure.pdf (39.8 KB)
CML70850.pdf (188.2 KB)
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