The rout in Amtek Auto shares continued for the second consecutive session, with the scrip losing an additional 29% on Thursday and nearly 65% in the last eight sessions in the aftermath of F&O exclusion, concerns over its inability to repay piling debt and possible regulatory action on investor complaints.
However, Gautam Malhotra, MD, Amtek Auto, told a business news channel that there was nothing fundamentally wrong with the company. Malhotra also denied that the company was facing any problems regarding repayment to lenders.
Amtek shares plunged nearly 40% in the last hour of trade on Wednesday following a stock exchange announcement that it will exclude the stock from the derivatives segment after the October expiry.
More than 8 crore shares exchanged hands on the BSE and the NSE, 24.72 times the average 30-day average volume. The company’s futures contract for August and September expiry plunged more than 28% and open interest declined by 4.85% or 6.24 lakh contracts. Since the beginning of August, open interest has fallen 38%, indicating huge unwinding of long positions.
Automobile analysts estimated the company’s consolidated debt at more than Rs 18,000 crore, twice its equity.
Amtek Auto’s debt-to-equity ratio is the highest for an auto component maker across emerging economies in the Asia Pacific region, Bloomberg data showed. Amtek reported a loss of Rs 236.5 crore in its third quarter compared to a profit of R114.7 crore in the corresponding period last year. Earlier this month, FE had reported that Amtek’s subsidiary company Castex Technologies (formerly Amtek India) had come under the regulator scanner after its FCCB holders, including a set of FIIs, complained to Sebi and stock exchanges about price manipulation. Thursday’s fall in Amtek’s stock price also reflected on other subsidiary companies as Metalyst Forgings, JMT Auto and Castex Technologies hitting their respective lower circuits on the bourses.