Paytm, IFCI, Reliance Power and 401 other stocks freeze at upper circuits

TRF, KIOCL, GE T&D India, Dredging Corporation of India, Azad Engineering, and Balaji Telefilms were some of the other stocks which were locked in the upper circuits of 5 per cent to 20 per cent

Shares of One 97 Communications (OCL), the parent of fintech giant Paytm; state-owned financial institution company IFCI and power generation companies – Reliance Power, Waaree Renewable Technologies, and Orient Green Power Company – were among 404 stocks which were locked in their respective upper circuits on the BSE on Wednesday, in an otherwise subdued market. In comparison, the S&P BSE Sensex was down 0.16 per cent at 72,071 at 1:08 PM.

TRF, KIOCL, GE T&D India, Dredging Corporation of India, Salasar Techno Engineering, Jaiprakash Associates, Azad Engineering, and Balaji Telefilms were some of the other stocks which were locked in the upper circuits of 5 per cent to 20 per cent.

Among individual stocks, OCL was locked in the upper circuit of 10 per cent at Rs 496.75. The stock of the fintech company has rebounded 26 per cent from its record low of Rs 395.50 touched on Tuesday in the intraday trade. A combined 22.43 million equity shares had changed hands and there are pending buy orders for 8.5 million shares on the NSE and BSE till the time of writing of this report.

During the past four trading sessions, between February 1 and February 6, the stock tanked 48 per cent from a level of Rs 761, after the Reserve Bank of India (RBI) ordered Paytm Payments Bank (PPBL), the associate company of OCL, to cease major banking services after February 29.

After issuing directions under Section 35A of the Banking Regulation Act, 1949, the RBI is considering either cancelling the licence of PPBL or superseding its board after the settlement of all pipeline transactions and nodal accounts are completed by March 15, Business Standard reported quoting sources. CLICK HERE FOR FULL REPORT

Meanwhile, shares of Tata Group company, TRF, were also locked in the 20 per cent upper circuit at Rs 328.40 after the company withdrew its merger with Tata Steel. The plan was called off as TRF said it has seen its business performance improve in the last few quarters.

Shares of IFCI, too, were frozen in the upper circuit for a second straight day, up 5 per cent at Rs 68.54 on the BSE. In the past three weeks, the stock price of the state-owned company has more-than-doubled, zooming 117 per cent, from a level of Rs 31.52 hit on January 17. Currently, the stock is quoting at its highest level since January 2011. It had hit a record high of Rs 121.20 on December 17, 2007.

The board of directors of IFCI is scheduled to meet on Friday, February 9, 2024 to consider and approve quarterly financial results for quarter ended December 31, 2023 (Q3FY24).

IFCI has shifted its focus from the lending activities to fee-based business. Besides managing the Sugar Development Fund (SDF), the company is also managing and monitoring the implementation of the PLI schemes of the Government of India. The company earned Rs 59 crore as at March 2023, and sees the fee-based business as a steady source of revenue, Brickwork Ratings had said in its rating rationale.

Besides, it has managed its debt repayments during the last few years by running down its standard loan book, making recoveries from non-performing advances (NPAs) and divesting its non-core assets.

However, with a significant reduction in the standard loan book and given its limited scale in relation to the size of the repayment obligations, the company's ability to incrementally manage debt repayments out of the residual performing book will remain a challenge, Icra had said in its May 2023 rating rationale.

"Moreover, IFCI will have to rely on timely support from the GoI, apart from recoveries from NPA accounts or divestment of key subsidiaries, to service its upcoming repayment obligations," the rating agency said.