Videocon Inds on a new low

Videocon Industries has been hitting the new lows almost every day since the beginning of this week. Topping the list amongst the losers on the BSE, today too, the stock was locked on the 10% lower circuit at Rs.58.35, a new low.

The company’s fight with its gargantuan debt is scaring the marketmen. The consumer electronics and home appliances manufacturer’s total debt stood at Rs 43,017 crore as on June 2016, according to CARE Ratings and Research. . 99.26% of promoter shareholding is pledged with various lenders at the end of March 31, 2017. Clearly, the company is leveraged to the hilt.

The big fright came when Dena Bank classified loans to Videocon as a non-performing asset when the Bank announced its numbers on 9th May.

The company did try to bring down its debt through some restructuring – merging its DTH television services business, Videocon D2H with Dish TV but in April, the corporate governance advisory Stakeholders' Empowerment Services (SES) has asked shareholders of Dish TV India to vote against the proposed merger citing lack of transparency in the valuation and fairness reports.

The company is due to declare its Q4 and FY17 numbers on 29th May.