Videocon Industries: Second 20% Lower Circuit In Two Days
Dena Bank classified the company’s account as an NPA on May 11.
Videocon Industries Ltd.’s shares hit the 20 percent lower circuit for the second consecutive session amid worries over the company’s debt.
Nearly 63 lakh shares are pending in sell orders on the National Stock Exchange and 22.9 lakh shares on the BSE. The stock, which hit its 52-week high of Rs 115 on October 6, has since fallen 65.6 percent. Its Relative Strength Index reading drifted below 30 on May 10, the level that analysts consider as oversold.
As much as 99.26 percent of promoter shareholding was pledged with various lenders at the end of March 31, 2017. Government-run Dena Bank classified loans to Videocon as a non-performing asset when the lender announced its March quarter earnings on May 9.
The consumer electronics and home appliances manufacturer’s total debt stood at Rs 43,017 crore as on June 2016, according to CARE Ratings and Research. The BSE has sought clarification from the management with reference to a CNBC-TV18 report on loan repayment worries for the company.
As part of its efforts to pare debt, the Venugopal Dhoot-led company merged its direct-to-home television service business, Videocon D2H Ltd., with Dish TV India Ltd. in November 2016. However, earlier this month, corporate governance advisory Stakeholders' Empowerment Services (SES) asked shareholders of Dish TV India to vote against the proposed merger citing lack of transparency in the valuation and fairness reports.
Videocon is slated to report its results for the January to March quarter on May 29. The company's standalone net loss had widened to Rs 509.78 crore in the quarter ended December, compared to a loss of Rs 84.42 crore in the corresponding period in the previous year.