Sujana Towers slippage of Rs 400 cr knocks out profit from IDBI Bank

A heavy provision for slippage of Sujana Towers Ltd (STL), a steel product company, put pressure on bottom-line of IDBI Bank in the second quarter, forcing lender to post a flat growth in net profit. The public sector lender's exposure to Hyderabad-based company is about Rs 400 crore.

An IDBI Bank official said units, be it in steel making or steel product segment, have been hit by slump in demand, predominantly reflecting effect of economic slowdown. The other two group companies including one in metal products segment are facing severe stress.

Every effort was made to avoid this account from becoming non-performing asset (NPA) but in vein. The balance sheet of the company is stretched, thus facing challenge to service its debt, the executive said.

STL posted a net loss of Rs 15.24 crore on total income from operations of Rs 302.28 crore for the second quarter ended September 2015. For the first quarter ended June 2015 also it had posted net loss of Rs 11.90 crore on total income of Rs 333.63 crore, according to filings with Bombay Stock Exchange (BSE). The total debt of company was Rs 1,716 crore comprising long term borrowings of Rs 997 crore and short term loans of Rs 719 crore.

According to company website Sujana Towers, an entity listed BSE, designs and manufactures telecommunication and transmission towers. The company provides a range of pipe type structures used for Radar Towers and Switch Towers. Under the integrated infrastructure activity, it provides high tension (HT) towers for power sector with ranges up to 765 KV.

Sujana Group started as a domestic appliances company, in 1986. Now as a $2 billion dollar conglomerate, Sujana Group has diversified into multiple businesses - Steel, Power and Telecom Infra, Appliances, International Trade, Bearings, Castings, and Urban Infrastructure. Sujana Group's founder-Chairman is Y S Chowdary. Its manufacturing units are located in Hyderabad, Visakhapatnam and Chennai.