IGC Stock Pulls Back After Solid Run Up Past Two Weeks

IGC stock

IGC stock has been correcting since yesterday on profit-taking after rising as much as 150% since June 13.

Stock Jumps After Big Announcement

On June 14, India Globalization Capital Inc (NYSE:IGC) made a significant announcement about the fact that it was going to participate in hemp production as part of the Industrial Hemp Program in Arizona. The market obviously took notice of the announcement, and IGC stock rallied by as much as 50% on the same day. The momentum continued, IGC stock gaining 100% since the announcement so far.

The company’s wholly-owned subsidiary Holi Hemp submitted the application to cultivate hemp in Arizona, and the approval was granted under the provisions of the Industrial Hemp Program. Developed by the Arizona Department of Agriculture, companies with permission to participate in the Industrial Hemp Program certainly have a slight advantage in the market, as is evidenced by the IGC stock climb.

Following the granting of this license, Holi Hemp will now be able to create a hemp cultivation site in Arizona. The eventual aim of the company is to extract CBD and build its brand. Ram Mukunda, the Chief Executive Officer of India Globalization Capital, stated that the logic behind choosing Arizona lay in the fact that the logistics suit the company perfectly. He added that the climate, labor costs, political climate, and market penetration were some of the other factors that prompted the company to go for Arizona.

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Now, it seems, the company's stock is loosening somewhat from the hype of this deal. IGC stock has fallen about 25% from yesterday's peak price of $2.05. However, the stock is still up 100% over the past two weeks.

Company's Financials

It goes without saying that this is a highly important development for the company, but in addition to that, it is necessary to note that India Globalization Capital also reported strong revenues from its two main businesses on June 17. Its main businesses are CBD products and infrastructure.

The revenues for the year stood at $5.1 million, which was a healthy jump from last year’s revenue of $2.2 million. It was only in the last week of 2018 that its revenues from Holi Hemp kicked in. However, it should be noted that it was still a handsome figure of $25,000.

At the time of writing, IGC stock is trading lower by 9.80% at $1.52.

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