The share price of Videocon fell by 42% and hit the lower circuit in the last three trading sessions. In an exchange filing on Tuesday, Videocon said that Dena Bank has classified its loan worth Rs 520 crore as a non-performing asset. “This has resulted in some negative publicity of the company and, accordingly, impacted its stock price. We believe that the recent crash in the stock price of the company could be due to the said classification of Videocon’s loan as NPA by Dena Bank. We are not aware of any other information which could explain the movement in the trading,” the company said in the filing.
The company has lost Rs 1,408 crore in market capitalisation in the past three sessions. Videocon ended Wednesday’s session at Rs 58.35, the lowest since August 2004.
The company has reported losses in the last five consecutive quarters. For the quarter ended December 2016, the company posted a loss of Rs 509 crore against a loss of Rs 84 during the same period in theprevious year.
The company had a total debt of Rs 47,554 crore as of December 2015. Around 99.26% of the promoter holding in the company is pledged.
AK Prabhakar, head of Research at IDBI Capital, said Videocon’s debts are very high and there are serious doubts about the company’s ability to repay their debts. Regarding prospects of the stock Prabhakar said it will better to stay away from the stock and advised the existing shareholders to exit the stock.