Hikal shares drop over 5% after Gujarat pollution control board rap

Shares of Hikal, a speciality chemicals company, fell more than 5 per cent on Monday following a directive from the Gujarat Pollution Control Board (GPCB) to cease operations at its Bharuch plant.

“This directive comes in light of an alleged violation reported to have occurred in 2021,” the company has said in a stock exchange notification.

Shares of Hikal were last trading at Rs 286, down 5.5 per cent over its previous close.

The GPCB’s order was issued on July 21, and the company has been told to cease operations within 15 days from the order date. 

Hikal has said, “The financial impact of the order is not ascertainable at this point.”

The alleged violations pertain to certain provisions of the Environment (Protection) Act, 1986.

“At Hikal, we take environmental compliance with the utmost seriousness, and we recognize the significance of adherence to regulations and maintaining ecological harmony. We wish to assure our stakeholders that we are taking immediate and appropriate measures to address the concerns raised by the regulatory authorities. Our team is actively engaged in working with the GPCB to thoroughly understand the reasons behind the direction and to seek a resolution in the most efficient and transparent manner possible,” Hikal said in a statement.

Following the latest slump, shares for Hikal are now down nearly 30 per cent on a year-to-date basis even as the BSE Smallcap index has risen 18 per cent.

Market experts said the infighting between the two promoters of Hikal—Baba Kalyani and sister Sugandha Hiremath— has weighed on the stock price performance this year.

The Kalyani and Hiremath families are mired in a legal dispute, with the latter seeking the transfer of ownership of shares held by the Kalyani group, citing nearly a three-decade-old family arrangement. The Bombay High Court is hearing the dispute.

In a note in May, governance firm InGovern said, “The dispute puts the company into an uncertain future with respect to its growth plans as management bandwidth could be severely constrained and distracted given that the managing director of the company is a member of one of the warring promoter groups.”

Currently, Kalyani group firms Kalyani Investment Company and BF Investment (BFIL) hold 31.36 per cent and 2.65 per cent stake in Hikal, which the Hiremath family is staking claim over.

Coffee Day shares drop 20%

One of the lenders of Coffee Day Global, a subsidiary of Coffee Day Enterprises has filed a case with the National Company Law Tribunal (NCLT), Bengaluru under Section 7 of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) for Rs 94 crore, the company said in a stock exchange filing. Coffee Day Enterprises stock ended 19.4 per cent lower at Rs 32 on NSE.  BS Reporter