The steel plant of Ispat Industries at Dolvi, Maharashtra has been closed for over a month due to a cash crunch. But the company has not bothered to inform the stock exchanges
Ispat Industries, which has been subjected to a massive countrywide raid by the revenue intelligence wing of the Central Board of Direct Taxes (CBDT) in the past 24 hours, is in an acute cash crunch. The cash crunch has forced the closure of the company's electric arc furnace in Dolvi, Maharashtra, which has a capacity to make 3.3 million tonnes of steel and also the cold rolling and galvanizing mill at Kalmeshwar, near Nagpur.
Amazingly, the mill has remained closed from 3rd November but the bourses have not been informed. Moneylife contacted the company, the Bombay Stock Exchange (BSE) and the Securities and Exchange Board of India (SEBI) to find out whether the exchange and the regulator had been informed of this material change but received no reply till the time of writing.
Yesterday, The Economic Times reported that Ispat is up for sale and will possibly be bought by Arcelor Mittal. Based on the report, the Ispat Industries stock gained 12% yesterday and another 4% today to close at Rs18.65 on the BSE. The media has been writing about a possible change of control in Ispat regularly. Each of these reports has turned out to be untrue. The stock, however, jumps sharply on such reports, which possibly helps some well-placed speculators.
Ispat has been making continuous losses for the past many years and in the September quarter again it reported a massive loss. The company lost Rs332 crore compared to a loss of Rs79.4 crore in the corresponding quarter last year.
While Ispat has been perpetually starved for cash, in November news reports quoted Vinod Garg, executive director, commercial, as saying that the company will raise steel production capacity to 4.2 million tonnes per annum (MTPA) from 3.3 MTPA.
New Delhi: Private sector lenders ICICI Bank and HDFC Ltd today discontinued with teaser home loans -- under which customers get credit at concessional rates for the first few years -- in a move that reflects RBI's concern on such loans.
It could not be ascertained whether state-run SBI, which pioneered this scheme, too would be discontinuing with the concessional rate scheme.
According to sources, HDFC's scheme of dual rate home loan, which was to expire today, will not be extended.
ICICI Bank has withdrawn the teaser rates on home loans with immediate effect, an ICICI Bank spokesperson said.
Under teaser rate, HDFC offered home loans at a fixed rate of 8.5 per cent up to March 31, 2011, 9.5 per cent for a period between April 1, 2011 and March 31, 2012 and the applicable floating rate for the balance term.
Similarly, ICICI Bank had offered a rate of 8.5 per cent in the first year, 9.25 per cent in the second year and 1.5 per cent over and above the base rate in the third year.
It may be recalled that in its policy review meeting last month, RBI had voiced concern over the high risk of default on loans offered at teaser rates.
However, then many banks had expressed reservations, arguing that loan off-take would be impacted adversely.
The move by the top two private sector banks would temper the demand for housing loans and eventually help cool real estate rates in an economy faced with high inflation.
Hughes Communications India Ltd, a provider of broadband satellite and managed network services, has won two contracts.
The company has won the first contract from Allahabad Bank worth Rs40 crore. Hughes will provide broadband services connecting 1,400 locations with satellite terminals and 1,000 with terrestrial MPLS links.
The second contract, worth Rs12.5 crore, was awarded by the Central Bank of India to deploy a network of 1,955 satellite terminals.