Explained - MTAR Tech shares in yet another lower circuit; What happens in ASM Stage 4

Shares of MTAR Technologies Ltd. are locked in yet another lower circuit of 5% on Tuesday, July 21. This is the sixth lower circuit for the stock in the last seven trading sessions.

The stock has declined 23% during this seven-day stretch, extending its losses from record high levels, which the stock had surged to only at the same time last month.



As a result of this losing streak, the stock has not only slipped below its 50, but also its 100-Day Moving Average. This is for the first time since the start of the year that the stock has slipped below its 50-DMA and for the first time since September last year that the stock has slipped below its 100-Day Moving Average.

Recently, as a result of the sharp price swings seen in the stock, MTAR Tech was added to Stage 4 of the long-term Additional Surveillance Measures (ASM) framework.

What Is Stage 4 Of Long-Term ASM Framework?

Stage 4 of the Long-term ASM Framework is the strictest level of surveillance used by market regulator Securities and Exchange Board of India to monitor highly volatile stocks.

Under this framework, a 100% upfront margin is required to trade in the stock. No intraday leverage is allowed and client must provide the entire value of the trade in cash upfront as well.

Price band for the stock is capped at 5% in either direction under this stage, which explains the 5% lower circuit for MTAR Tech today.

All client trades are also settled on a gross basis under this stage and cannot be netted off or adjusted against other trades.

MTAR Tech expects to achieve an order book of over ₹5,000 crore for financial year 2027, along with EBITDA margin of 24%. While it sees a strong first half of the year, it expects the second half to be stronger.

Shares of MTAR Tech are now in a 5% lower circuit at ₹5,409. The stock is now down nearly 40% from the June 19 peak of ₹8,714.