The share price of Unitech hit a 4-month high on Monday, as the stock continued its surge following the government’s move to take over management control of the developer, following complaints by a large number of harried home buyers. The stock gained 10.6% to Rs 8.06 on the BSE, pushing up the realtor’s market capitalisation to Rs 2,107 crore. The stock, which emerged the top performer in the BSE 500 index on Monday, has gained 35.2% over the past three trading sessions, adding Rs 549 crore to the company’s market capitalisation.
The Supreme Court, which observed that it is concerned about home buyers and not the company or investors, agreed to hear the appeal of the existing promoters on Tuesday, challenging the recent order of the National Company Law Tribunal (NCLT), which allowed the government to appoint new directors to reconstitute the board of the company. The government counsel argued that the move was to guard against the company becoming insolvent, to protect the interests of 19,000 home buyers who are yet to receive their apartments.
NCLT invoked the provisions of the Companies Act to allow the central government to take over the company.
The company reported a consolidated net loss of Rs 403 crore in FY17, down from a loss of Rs 900 crore in the previous financial year. The net revenue of the company, which posted losses in the past three years, almost halved to Rs 1,730 crore in FY17. As on September-end 2017, the promoter group held 18% in the company, of which 73% has been pledged with financial institutions. According to Bloomberg data, the company had a gross debt of Rs 3,945 crore at the end of March 2017.