No buyers for GMM Pfaudler shares Tuesday morning. Trading has been frozen at the lower end of the 10 percent circuit filter at Rs 4682.70, a one-and-a-half month low.

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The promoters are trimming their stake through an offer for sale (OFS) by offering shares to the public at Rs 3500 per share, a 33 percent discount to the closing price on Monday. The announcement came post-market hours on Monday.

So, if you are holding GMM Pfaudler shares, it would make sense to dump the shares now and later buy it cheaper through the OFS route. And there is plenty of stock on offer. That is what everybody wants to do right now, and hence the plunge in the stock price.

The base offer is for 25.71 lakh shares, with an oversubscription option of 15.22 lakh shares. If the option is exercised, there will be around 41 lakh additional shares with the public, who right now hold a little over 36 lakh shares. Institutional investors, part of the public shareholders, hold less than 3 percent in the company.

Interestingly, some bears appeared to have had the foresight to borrow GMM Pfaudler shares from NSE's Stock Lending and Borrowing segment over the last week.

While details of the borrower or lender are not available, roughly 74,000 shares were borrowed through this window. This is a stock that has not seen any activity in the SLB segment so far this year. Stands to reason that the shares borrowed through SLB would have been dumped in the market.

Trading volumes over the last three sessions were higher than usual, with an average of 1.5 lakh shares changing hands on the NSE on each of these compared.

The one way decline in GMM share prices over five consecutive sessions in the run up to the announcement, coupled with the sudden interest in the SLB segment over the last week, indicates that some investors would have been aware of the impending OFS at a steep discount to market price.

GMM Pfaudler is in the midst of a complex scheme of arrangement involving the acquisition of the parent company by the arm. CNBC-TV18's Sonal Sachdev had argued that the restructuring could have been done in a far simpler manner. (Click here to read more)