ITD Cementation tanks 20% on heavy volumes, hits 4.5-year low

Shares of ITD Cementation India (ITD) slipped 20 per cent to hit a four-and-half year low of Rs 48 on the BSE on Tuesday on the back of heavy volumes. The stock of the construction and engineering company was trading at its lowest level since February 2015.

ITD, which was quoting lower for the seventh straight day, have plunged 33 per cent during the period, after rating agency ICRA placed ratings of its long-term fund based and non-fund based facilities worth of Rs 4,900 crore of the company under "watch with developing implications". In comparison, the S&P BSE Sensex has gained 4 per cent during the same period.

At 02:37 pm, the stock was down 12 per cent at Rs 53, as against a 0.3 per cent rise in the benchmark index. The trading volumes on the counter jumped six-fold with a combined 3.56 million equity shares, representing 2 per cent of the total equity, changing hands on the BSE and NSE till the time of writing of this report.

On September 06, 2019, ITD had informed BSE regarding an incident that occurred at the site of the ongoing underground construction of East-West Metro Corridor of Kolkata Metro Rail Corporation Limited (KMRCL). It is being undertaken by ITD - ITD Cem Joint Venture (ITD JV).

The total contract value of this project is Rs 1,770 crore (of which 65 per cent is completed) and ITD along with its JVs have furnished Rs 128 crore of bank guarantees for this project. KMRCL is currently reviewing the situation. The company is yet to ascertain the impact of this mishap on the project cost, execution timeline, assessment of damage to TBM/machinery, and consequently the overall impact on the profitability.

“At this stage, ICRA is unable to assess the impact of this mishap on the credit profile of ITD. Thus, the rating has been placed under watch with developing implications. ICRA will closely monitor the developments and would keep the investors updated on the implication of the same on the credit profile of the company,” ICRA said in rating rational on September 19.