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Infibeam saw a steep fall in its share priceReuters

Stock price of Infibeam Avenues, the country's first e-commerce company to list on the stock exchange, crashed by over 70% on Friday. The steep fall came after WhatsApp message raised concerns about the firm's accounting practices, including giving unsecured, interest-free loans to subsidiaries which do not have any assets.

The company denied this and said it had disclosed all the relevant information within the stipulated timeframe and has always provided clarifications whenever it has been asked to do so by stock exchanges.

The crash in the stock price from Rs 198 at close on Thursday to Rs 59 on Friday on the Bombay Stock Exchange came a day before Infibeam holds its annual general meeting. This resulted in nearly Rs 9,200 crore worth of investor wealth going down the drain.

On Friday, the company said the subsidiary in question runs its e-marketplace and is an e-infrastructure company and therefore regular accounting rules are waived. Infibeam says the loans given to the company have been mentioned in its annual reports for the last five years. It added that there is no dilution of stakes in the company by the promoter recently.

The broking house, which is purportedly behind the WhatsApp message, has denied sending any reports or notes to its clients.

However, this has been attributed by a section of the market to the crisis of confidence that has gripped the mid- and small-caps that affected the stock.

Also sharing the blame is the cash-settled equity derivatives market, of which Infibeam is a part of, as one of the reasons for the sharp crashes in the mid-cap stock segment.

Last week, housing finance company DHFL was down 60% in one session while Indiabulls Housing finance lost over 30% on the same day.

Top mutual fund houses hold shares of Infibeam, which is part of a consortium, which won a contract for five years and 10 months to operate the government e-marketplace.

At August end, schemes belonging to Axis MF, Aditya Birla Sunlife MF, Edelweiss MF, Indiabulls MF and ICICI Prudential MF had shares worth Rs 423 crore in Infibeam.