Buzzing stocks: Moser Baer, Bank of India, CESC, Hotel Leela
Experts said the concern now was that the government might put much-needed reforms on hold and instead opt for a populist Budget
Markets continued to trade lower Wednesday but shares in optical storage manufacturer Moser Baer, power supplier CESC and Luxury hotel chain Leela saw some buying interest on the back of news flow. The three stocks traded off the day's high at 1410 hours but they outperformed the broader markets. Here's why.
1) Moser Baer: (Up 4.1%)
The lenders have referred the entire Rs 2,500 crore debt for restructuring, sources have told NDTV Profit. OBC, Central Bank of India, PNB and SBI Associates are the biggest lenders of the company. The lenders likely to take 10-15% hit in net present value (NPV) on restructuring, sources said. The total credit exposure of the company stands at nearly Rs 2,500 crore. The restructuring package include two year moratorium on interest payments & capital infusion of Rs 40 crore by promoters.
2) CESC: (Up 1.6%)
Shares of CESC traded higher in a down market today. CESC produces and supplies power to the city of Calcutta. It has hiked power tariffs by 13% in Kolkata and neighboring areas. Tariffs have been raised from Rs 5.19 per unit to Rs 5.88 per unit. The hike will result in a total gain of Rs 550 crore. The extra cash will be provided towards cost escalations without any meaningful accretion to profit after tax (PAT).
3) Hotel Leela: (Up 0.6%)
Lenders have referred over Rs 4,000 crore debt to CDR for Corporate Debt Restructuring (CDR), sources have told NDTV Profit. Syndicate Bank, Bank of India, SBI and IOB are the largest lenders. The company is looking to cut interest burden and extend the repayment period, sources said. The lenders are unlikely to take a large hit as loans are secured.
Meanwhile, public sector lender Bank of India saw selling pressure after ratings agency Moody's downgraded the bank.
4) Bank of India: (Down 2.5%)
Ratings agency Moody's has downgraded Bank of India by one notch. Moody's has cut BoI's financial strength rating to D against D+. There has been an accelerated pace of deterioration in BOI's asset quality, Moody's said. Stressed core capital levels are another reason for downgrade. It will be difficult for BoI to improve its asset quality over next 12-18 months, Moody's noted. Moody's may revise rating to below D in 12 months if fundamentals don't improve.