VIDEOCON SHARES PLUNGE 20% ON CONCERNS OVER LOAN REPAYMENT

Shares of Videocon Industries Ltd fell 20% for the second straight session on Tuesday, amid reports of its inability to repay loans. The stock closed at ₹64.80, its lowest permissible trading limit for the day and also its 52-week low on BSE.

The stock had tumbled over 19% in the previous session too, wiping out ₹1,191.71 crore from its market valuation in two days.

Earlier on Tuesday, BSE had sought a clarification from the firm on reports highlighting worries over its loan repayment. In its reply, Videocon said that Dena Bank had recently announced that it had classified ₹520 crore that Videocon owed it as a non-performing asset.

“This has resulted into some negative publicity of the company and, accordingly, impacted its stock price. We believe that the recent crash on the stock price of the company could be due to the said classification,” the company’s response said. The company is not aware of any other information which could explain the movement in the trading, it added.

On May 9, Dena Bank had classified its Videocon debt as NPA. Later, Punjab National Bank also placed the firm’s debt under its so-called watch list.

At the end of September, Videocon had a debt of around ₹23,000 crore. However, some estimates place this higher. A February 16 Credit Suisse report estimated Videocon’s total borrowings at ₹47,679 crore.

Earlier this year, Videocon sold its Fort House building for ₹300 crore. In March 2016, Bharti Airtel Ltd acquired Videocon Telecommunications Ltd’s entire spectrum for ₹4,428 crore.