One stock that has been a 'constant loser' since June 2017 is Kwality Limited. On September 19, 2017, the stock closed at Rs 116.95. In 2 years, it fell 98.58 percent to Rs 1.65 per share on NSE on Tuesday. In fact, the stock hits new 52-week low every other day. In a period of last one year, the stock fell 91.65 percent, and about 79.39 percent this year.
The debt-ridden dairy firm was doing perfectly fine until 2016 when it raised Rs 300 crore from KKR Financial Services along with an additional commitment of Rs 200 crore. This amount was raised by the company to expand its reach and enter the consumer segment. However, Kwality failed to repay the amount as scheduled to its lender, which resulted in the company to appear in front of the National Company Law Tribunal (NCLT).
In the recent news, a consortium of Haldiram Snacks and Pioneer Securities have bid for the company, offering about 6 percent of the stressed dues to the financial creditors. The company owes Rs 1,969 crore to its lenders, and Haldiram Snacks has offered to pay only Rs 128 crore.
According to the data by Screener, the company’s net sales from March 2016 to March 2018 rose 19 percent, and borrowings rallied by 27 percent. As its borrowings began to rise, the reserves of the company started to shrink, which resulted in piling of debt. During this two-year period, the company’s borrowings along with its net sales started to surge, and soon enough the profits started to decrease.
In June quarter this fiscal year, the company’s net sales plunged 96.31 percent year-on-year (YoY) to Rs 47.99 crore. Net profits rose to a loss of Rs 64 crore as against the loss of Rs 1 lakh.
First Published: IST