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Videocon Industries Shares fall 53% in one week over loan deafult fears; could it bounce back?

The stock of Videocon Industries fell by 34.5 for every penny over the most recent two days as lenders selling the shares pledged by its promoters against loans. The stock of the consumer durables and oil major finished trading at Rs 64.80 each on Tuesday, and the organization lost Rs 1,200 crore of its fairly estimated worth since Monday after Dena Bank labeled it as a non-performing resource (NPA) a couple days back.

Videocon Company management said the firm had proposed to Indian banks to extend the term of its loans worth Rs 22,000 crore for more period of time after it lost a sizeable amount of money in its telecom wander. As per the organization’s assessments, it lost Rs 25,000 crore in its telecom arm after the Supreme Court scratched off its licenses in 2012. The leader organization owes another Rs 22,000 crore of credits from worldwide banks which are overhauled through incomes from its oil and gas fields abroad.

“We might want to present that Dena Bank has as of late declared that it had grouped Videocon’s credit adding up to Rs 520 crore as a non-performing resource. This has come about into some negative exposure of the organization and, as needs be, affected its stock price fall. We trust that the current crash on the stock price value of the organization could be expected to the said arrangement of Videocon’s advance as NPA by Dena Bank. We don’t know about some other data which could clarify the development in the exchanging,” the organization answered to the BSE after the trade looked for an elucidation on the fall in its stock cost.

According to market experts “There is very little straightforwardness about the organization’s oil resources and different organizations like DTH. Additionally, there are questions whether the promoters have the goal to reimburse the obligation,” he said. The Competition Commission of India declared on Tuesday evening that it has cleared the merger between Videocon DTH and Dish TV.

According to statistics collated from the BSE, the promoters own 66 per cent in the company and have pledged holdings worth Rs 1,421 crore.

At the present market value, Videocon’s market capitalisation remains at Rs 2,167 crore. Showcase specialists say the stock will keep on remaining under weight as the precarious adjustment would trigger liquidation of vowed offers if the promoters neglect to hack up edge cash.

Offers of the organization have split from the one-year high of Rs 114.9 touched in October 2016.

The organization promised to reimburse banks and said its prompt arrangement was to utilize benefits of its Indonesian oil piece to reimburse credits. The piece is presently worked by Pertamina, an Indonesian government-possessed organization, which claims a lion’s share stake in the field alongside Bharat Petroleum.

Considering the present oil costs, Videocon’s 23 for every penny offer is esteemed at $2.5 billion. In a prior meeting, the director of the Videocon gathering, Venugopal Dhoot, said the organization needed to rehash the accomplishment of Mozambique gas field which they sold for near $2.5 billion two years back. “The benefits from the Indonesian resource will go to Indian banks which have upheld us previously,” said Dhoot.

Venugopal Dhoot, chairman, Videocon Industries

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