Alok Textiles, with a market cap of Rs.460 crore and one-time, considered to be a shining star, is today worse than a penny stock. Over ambition, lop sided Govt policies and leveraging the company to the hilt – these have been the two banes of this company which literally sunk the company.

Sitting on a huge mound of debt of over Rs.18,000 crore, it is a surprise that the market continues to be surprised with its persistent losses, only going up with every quarter. The company ended Q1FY17 with a net loss at Rs.1212 crore on a 47% decline in total income at Rs.1811 crore. Interest outgo remains huge – in fact it has risen up 49% to Rs.912 crore.

It’s a consortium of 32 lenders who have lent this huge debt to the company and they have invoked the SDR but till date, there has been no update on that front. Promoters stake is at 36.29% of which 95.87% is pledged.