The promoters of realty developer Akruti City were forced to pledge additional shares after the company's stock plunged last month, following its exclusion from the futures and options (F&O) segment.
Akruti, which had earlier overtaken the country's second-biggest realtor Unitech and peers in market capitalisation, had seen its stock plunge more than 45 per cent a day after its shares were pulled out from the F&O segment. The company's stock dropped to Rs 999.45 on March 26, from Rs 1826.9 a day earlier.
Three promoter entities of Akruti were then collectively forced to pledge another 7 per cent of the company's equity on March 26, owing to a drop in stock, information provided by the company to the stock exchanges showed. With this additional pledge, the total amount of pledged shares have risen to 36 per cent of the company's equity.
Akruti’s promoters and its related entities owned 89.96 per cent of the company as of December 31, 2008. The stake has dropped by 82.83 per cent in the quarter ending March 31, data on the exchanges showed. A total of 7.12 per cent of pledged shares are with IDBI Trusteeship Services Ltd, a custodian for the lender. Akruti was excluded from F&O on March 19 but the stock wasn't removed from the segment till March 27.
"It (pledge) is a security for loans availed by the company. Once loans are repaid, shares will come back to the company. It may also be the additional security for the fall in share price as per the lender's discretion,'' said a senior company official who did not want to be named. Company chairman Hemant Shah did not respond to calls and messages.
Akruti's monthly average share price was Rs 644.43, Rs 703.26, Rs 826.1 and Rs 1,244.95 in December, January, February and March, respectively. The company's stock went up nearly 160 per cent from the beginning of March till the date when stock was excluded from the F&O segment after market hours. Shares of the company fell 5 per cent to Rs 343 on the Bombay Stock Exchange today.
"Akruti’s aggressive development strategy is reflected in the fact that ongoing and planned projects are six times the size of its completed projects. The company has been facing extended delays in ongoing projects. The company’s liquidity has been adversely impacted by the overall slowdown in the sector, coupled with its aggressive development strategy and increased focus on commercial projects,'' Crisil noted in the statement.
The company had a total debt of Rs 829.19 crore on its books as of March 31, 2008 and a debt equity ratio of 0.71. It had a negative cash flow of Rs 109 crore from operations as on March 31, 2008.