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Videocon Industries shares hit lower circuit on third consecutive day

LiveMint logoLiveMint 24-05-2017 Ravindra N. Sonavane

Mumbai: Shares of Videocon Industries hit the lower circuit on the third straight day, registering a fall of 42% in this period to hit near 13-year low after public sector lenders—Dena Bank Ltd and Punjab National Bank Ltd—declared its loans as non-performing assets (NPAs).

Investors were cautious and selling the scrip on worries of its inability to repay the loans after such deceleration, a domestic analyst said, on the condition of anonymity.

The stock hit a low of Rs58.35, a level last seen on 26 August 2004, and fell as much as 10%. So far this year, it has fallen 43.4%.

On Tuesday, the company clarified to the exchanges that Dena Bank has classified its loan amount to Rs520 crore as NPAs.

“This 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 of loans by Dena Bank,” the bank said in a notice to the BSE on Wednesday.

According to an IDFC Securities report, dated 16 May, Punjab National Bank has total exposure of Rs1,500 crore to the company of which Rs350 crore has been classified as NPAs.

The company has reported losses in five consecutive quarters. It has not announced March quarter earnings. As of June 2016, it had a total debt of Rs23,900 crore.

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