Cupid Shares Hit Lower Circuit After ASM Tag: What Investors Should Watch Next
Cupid Ltd shares saw sharp selling pressure after being placed under the Additional Surveillance Measure (ASM) framework. The stock hit a 20% lower circuit and was trading near ₹420, ending its strong multi-day rally.
The correction comes after an exceptional run-up over the past year, where the stock delivered more than 500% returns, attracting heavy speculative interest.
Why Did Cupid Shares Fall Sharply?
The key trigger behind the fall is the stock being moved to ASM Stage 1 (Long-Term) by the exchange.
Under this framework:
- Stocks attract 100% margin requirements
- Intraday leverage is effectively removed
- Trading activity becomes more restrictive
The move is aimed at controlling excessive volatility and speculative trading in stocks that have seen sharp and fast price movements.
According to a circular issued by National Stock Exchange, the 100% margin rule will apply from January 6, 2026, on all open and new positions.
How the Market Reacted
The impact was immediate. Heavy selling was seen during the session, with trading volumes rising sharply compared to previous days.
Market data showed:
- Over 22 million shares traded in a single session
- Volumes were multiple times higher than the previous day
- Several block deals were reported, indicating profit booking by short-term participants
The sharp fall reflects how sensitive high-momentum small-cap stocks can be to regulatory actions.
What Is Supporting the Business Story?
Despite the near-term correction, investors should note that Cupid’s rally over the past year was driven by fundamental improvements.
The company is engaged in manufacturing:
- Male and female condoms
- Water-based lubricant jelly
- IVD kits
Cupid has also expanded its global footprint and reduced promoter pledge levels. As per its latest disclosure, promoter pledge has come down to 20%, from over 36% earlier, which signals improving financial discipline.
Technical View: Key Levels to Watch
Market experts believe the stock was ripe for profit booking after the steep rally.
From a technical perspective:
- The stock is trading below its 20-day EMA, indicating short-term weakness
- The ₹370 zone is seen as an important support area
- A fall below this level may increase downside pressure
- On the upside, ₹445 is considered a strong resistance
Analysts suggest that the stock needs time to cool off and form a stable base before any fresh directional move.
What Lies Ahead for Investors?
In the near term, volatility is likely to remain high due to ASM restrictions and reduced trading flexibility. Fresh positions may require caution until price stability improves.
However, from a longer-term view, investors will closely track:
- Earnings consistency
- Execution of expansion plans
- Further reduction in promoter pledge
- Ability to sustain growth after the sharp rally
A healthy consolidation phase could help reset expectations and create a more balanced setup.
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Disclaimer
This article is written only for general information and educational purposes. It is not investment advice. Stock market investments are subject to risk. Investors should consult their financial advisor before making any investment decision.
Sumit Ghatala is a stock market researcher and financial content writer with over 8 years of experience tracking Indian equity markets, corporate earnings, and sectoral trends. He focuses on analysing company fundamentals, quarterly results, and broader market movements to provide readers with clear and structured insights.
Sumit’s work is aimed at simplifying complex market data and helping retail investors understand risks, opportunities, and long-term perspectives through balanced and reader-friendly analysis.