JSPL extends downtrend, fall 3.5% on debt worries, downgrade

Shares of Jindal Steel & Power Ltd continued to face selling pressure for a second straight day, falling 3.5 per cent on worries over the company's huge debt burden and a rating downgrade.
After plunging 6.93 per cent to Rs 55 in intra-day trade, the stock finally ended at Rs 57.05, down 3.47 per cent on BSE.
At NSE, the stock slipped 3.55 per cent to close at Rs 57.05.
Shares of the company have been under pressure in the recent past, but the plunge has deepened further over the last couple of days following a credit rating downgrade by Crisil on Monday.

Earlier today, the BSE sought clarification from JSPL with regard to the reports about downgrade to below investment grade, to which the company was yet to respond.
Industry analysts said the rating downgrade by Crisil, which has assigned a negative outlook on the company, may also result in decline in NAVs (net assets value) of mutual fund schemes with exposure to JSPL's debt papers.

After Amtek Auto crisis, some leading mutual funds are staring at potential risks from their over Rs 2,500-crore exposure to bonds issued by Jindal Steel & Power (JSPL), given the company's huge debt burden and downgrade in its ratings.

Franklin Templeton Mutual Fund is said to have exposure to the tune of over Rs 1,600 crore, while that of ICICI Prudential is estimated at nearly Rs 500 crore.
JSPL, which is into diverse segments including steel, cement and power, said in a recent investor presentation that it is focussing on reducing debt and interest costs.