Bhushan Steel slumps over 76% from 1 August

Bhushan Steel was locked at 5% lower circuit at Rs 91.50 at 12:06 IST on BSE, with the stock extending its recent steep slide.

Meanwhile, the BSE Sensex was up 102.13 points, or 0.38%, to 26,969.68

On BSE, so far 19,995 shares were traded in the counter with pending sell orders of 8.73 lakh shares at lower circuit. The stock has an average volume of 15,000 shares in the past two weeks.

The stock opened with downward gap, sliding by the maximum 5% daily circuit and remained locked at the 5% level at Rs 91.50 so far in the day, also its 52-week low.

Shares of Bhushan Steel have tumbled 76.82% from Rs 394.85 on 1 August 2014. Earlier last month, the Central Bureau of Investigation (CBI) arrested Bhushan Steel's Vice Chairman and Managing Director Neeraj Singal in the Rs 50 lakh bribery scandal involving Syndicate Bank chairman S K Jain, who is also in custody.

Meanwhile, as per recent media reports, lenders to Bhushan Steel have effectively taken charge of the company, and asked for three director posts on the company's board (which will then have 14 members) apart from conducting a forensic audit of the company's books and a concurrent one of its cash flows. The first audit will find out whether the company hid something or has indulged in any malpractice, while the second will simply keep track of its cash.

A consortium of 51 lenders has an exposure of around Rs 40000 crore to Bhushan Steel and met on 18 August 2014 to decide on ways to protect their exposure, reports suggested.

Bhushan Steel reported a net loss of Rs 141.63 crore in Q1 June 2014 compared with net profit of Rs 76.26 crore in Q1 June 2013. Total income rose 12.41% to Rs 2803.72 crore in Q1 June 2014 over Q1 June 2013.

Bhushan Steel is one of the leading prominent player in steel industry. The company is now India's 3rd largest secondary steel producer company with an existing steel production capacity of 2 million tonne per annum (approx).

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