This is what we call collateral damage. The top loser on the BSE currently is Shriram TransportFinance Co – it went down over 19%.

The reason - its annual report mentioned that it has given a Rs 870-crore corporate guarantee to its unlisted entity SVL Ltd.  The guarantee is with respect to non-convertible debentures issued by SVL.

Following this, foreign brokerage house, Jefferies, put out a note voicing concern that with subsidiaries like SVL under financial stress, the repayment could pose trouble. Jefferies has said, “if guarantee is invoked and liability devolves on Shriram Transport Finance, its book value may be hit by 4 to 5%.”

So why has Piramal Enterprises slipped 2.5% to Rs.2404 today? The direct slump in Shriram Transport and Shriram City Union has a direct impact as Piramal has a direct exposure of almost 10% in both these companies.