Bhushan Steel's free fall continues as lenders invoke pledged shares

Shares of Bhushan Steel is locked in lower circuit for ninth day in a row, down 5% at Rs 145 on BSE, with no buyers on the counter after the company said that lenders have invoked large number of pledged shares held by them.

The stock is currently trading its lowest level since June 2009. At 1050 hours, a combined 50,510 shares changed hands and there are pending sell orders 2.42 million shares on BSE and NSE.

The lenders including Kotak Mahindra Investments, Aditya Birla Finance, L&T Finance Corporation and ECL Finance have collectively invoked nearly 14 million pledged shares of Bhushan Steel, which has been offloaded in the open market to recover dues.

As disclosed to stock exchanges, between August 4 and August 13, the lenders have invoked 13.89 million shares representing 6% of total equity capital of Bhushan Steel.

Since August 5, the stock has plunged 62% from Rs 381, after the Central Bureau of Investigation (CBI) arrested the company’s vice-chairman and managing director, Neeraj Singal, in connection with Rs 50-lakh bribery scandal. The stock is currently trading at its lowest level since August 2009.

As per June 2014 shareholding pattern data, promoters held 71.29% stake in the company, of which 74.21% was pledged with financial institutions.