Loan recast boost: Bhushan Steel stock hits 20% upper circuit in lacklustre market

Shares of debt-laden Bhushan Steel was frozen at the upper limit of 20 percent in early trade Thursday, after the company post-market hours Wednesday received lenders’ approval for long-term restructuring of about Rs 30,000 crore loans under a scheme of Reserve Bank of India.

The Joint Lenders Forum (JLF) has agreed to extend the loans of Bhushan Steel for a tenure of 25 years under the RBI’s scheme for long-term structuring of loans in line with cash flows, a PTI report said.

A consortium of bankers led by Punjab National Bank (PNB) has a total exposure of about Rs 30,000 crore in the company.

Strong optimism in the counter was evident despite a lacklustre broad market sentiment with benchmark Sensex quoted 16 points lower at 27,671.

At 10.05 am, Bhushan Steel stock was trading at Rs 66 a share, up 20 percent, on volumes of 1.45 lakh shares traded on BSE so far.

The stock has been under pressure over the past one year as sluggish demand and subdued steel prices continued to hit business fundamentals, while the arrest of its vice-chairman and managing director Neeraj Singhal in August last year in an alleged cash-for-loan scam worsened the stock performance there after.

In the past one month, Bhushan Steel stock has tumbled 23 percent while taking a hit of 25 percent since the beginning of 2015.

The Delhi-based firm’s has also faced challenges on the earnings front, with the company posting net loss of Rs 1,254 crore in 2014-15 as against a net profit of Rs 62 crore a year ago fiscal.