Raj Rayon Industries Ltd Hits Lower Circuit Amid Heavy Selling Pressure

Intraday Price Movement and Circuit Trigger

On 24 Feb 2026, Raj Rayon Industries Ltd (Stock ID: 535009) saw its price decline by ₹0.45, or 1.96%, settling at ₹22.49, the lower end of its price band for the day. The stock’s high was ₹22.85, while the low matched the closing price, signalling that it hit the maximum permissible daily fall, triggering the lower circuit filter. This mechanism is designed to curb excessive volatility but also highlights the severity of selling pressure.

The total traded volume was a mere 0.01338 lakh shares, with turnover amounting to ₹0.003 crore, indicating thin liquidity and a lack of buyers willing to absorb the supply at higher levels. The stock’s price band was set at 2%, consistent with its micro-cap status and volatility profile.

Sector and Market Context

The Garments & Apparels sector itself was under pressure, with a sectoral decline of 1.89% on the same day, slightly less severe than Raj Rayon’s fall. The broader Sensex index declined by 0.89%, reflecting a cautious market mood. Raj Rayon’s underperformance relative to both the sector and benchmark index underscores company-specific concerns exacerbating the general market weakness.

Over the past five trading sessions, the stock has consecutively declined, losing 9.46% in total returns. This sustained downtrend has eroded investor confidence and contributed to the panic selling observed on 24 Feb.

Technical Indicators and Investor Participation

From a technical standpoint, Raj Rayon’s last traded price remains above its 20-day and 50-day moving averages but below the 5-day, 100-day, and 200-day averages. This mixed picture suggests short-term weakness amid longer-term support levels. The recent fall below the 5-day moving average is particularly concerning, signalling a shift in momentum towards the downside.

Investor participation has notably increased, with delivery volume on 23 Feb rising by 48.71% to 2,150 shares compared to the five-day average. This spike in delivery volume indicates that more investors are holding shares rather than trading intraday, possibly reflecting a mix of panic selling and forced exits by long-term holders.

Fundamental and Market Capitalisation Overview

Raj Rayon Industries Ltd operates within the Garments & Apparels industry, a sector characterised by intense competition and sensitivity to consumer demand cycles. The company’s market capitalisation stands at ₹1,276 crore, categorising it as a micro-cap stock. This size often entails higher volatility and liquidity challenges, as evidenced by the low traded volumes and sharp price movements.

MarketsMOJO assigns Raj Rayon a Mojo Score of 31.0, reflecting a Sell rating, which was downgraded from a Strong Sell on 11 Feb 2026. The Market Cap Grade is 4, indicating moderate concerns related to company size and market presence. These ratings suggest cautious investor sentiment and highlight the risks associated with holding the stock amid current market conditions.

Liquidity and Trading Dynamics

Liquidity remains a critical issue for Raj Rayon. The stock’s traded value corresponds to only 2% of its five-day average traded value, which is insufficient to support large trade sizes. This thin liquidity exacerbates price volatility, as even modest selling pressure can trigger significant price declines and circuit hits.

The unfilled supply on 24 Feb indicates that sellers were unable to find buyers at prices above the lower circuit, forcing the stock to close at the maximum permissible loss. Such scenarios often reflect panic selling, where investors rush to exit positions amid uncertainty, further depressing prices.

Investor Sentiment and Outlook

The persistent decline over the past week, combined with the recent lower circuit hit, signals deteriorating investor confidence. While the stock remains above some longer-term moving averages, the short-term technical weakness and increased delivery volumes suggest that selling pressure may continue in the near term.

Investors should weigh the risks of holding Raj Rayon against the broader sectoral trends and company fundamentals. The downgrade in Mojo Grade from Strong Sell to Sell indicates some stabilisation but still advises caution. Given the micro-cap status and liquidity constraints, the stock may remain vulnerable to sharp swings until clearer positive catalysts emerge.

Conclusion: Navigating Volatility in Raj Rayon

Raj Rayon Industries Ltd’s lower circuit hit on 24 Feb 2026 highlights the challenges faced by micro-cap stocks in volatile sectors such as Garments & Apparels. Heavy selling pressure, unfilled supply, and panic-driven exits have pushed the stock to its daily loss limit, reflecting a fragile investor sentiment.

While the company’s fundamentals and sectoral positioning offer some support, the current technical and liquidity constraints suggest that investors should exercise caution. Monitoring upcoming earnings, sectoral developments, and any changes in market sentiment will be crucial for assessing the stock’s recovery potential.

For investors seeking exposure to the Garments & Apparels space, considering alternatives with stronger liquidity profiles and higher Mojo Scores may be prudent until Raj Rayon demonstrates sustained stability.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today