Life Insurance Corporation (LIC), which holds a 3.54% stake in Bhushan Steel, has seen the market value of its shares fall by R174 crore since the steel maker’s name cropped up in the Syndicate Bank bribery case on August 2.
With Bhushan Steel’s share prices falling 54.98% since August 2, the value of LIC’s shares has eroded to R142.46 crore from R316.47 crore during this period. LIC holds 80 lakh shares in the company as on June quarter.
Apart from LIC, retail investors have also seen a sharp fall in the market value of their shares. Retail investors (individual shareholders holding nominal share capital up to R1 lakh) have seen the value of their shares fall by R66 crore since August 2.
On August 2, the CBI arrested Syndicate Bank’s chairman SK Jain (now suspended), accusing him of taking R50 lakh for extending the credit limit of Bhushan Steel and Prakash Industries.
Last week, Neeraj Singal, Bhushan Steel’s chairman and managing director, was arrested by the CBI as part of its investigation.
On Tuesday, Bhushan Steel reported a net loss of R141.63 crore for Q1FY15. The company had posted a net profit of R76.26 crore in the year-ago period. This was the third straight loss-making quarter for the company.
On Tuesday, the scrip was locked at the lower circuit of 10% at R177.75. YTD, the scrip has declined 63.01%.