Shares of Polycab India fell over 5% to an intraday low of Rs 7,995 on the National Stock Exchange on Ocotber 13 after the exchange notified it would exclude the company from the equity derivatives segment under the Insolvency and Bankruptcy Code framework. At 11:20 am, shares of the company were trading 3% lower at Rs 8,156 apiece. Over 500,000 shares of the company changed hands on the bourse so far, almost fivefold the number of shares traded till the same time Monday.
No new futures and options contracts of Polycab will be introduced after the October contracts expire, NSE said, adding that existing October, November and December contracts will remain available until their respective expiry dates. Derivatives contract trading in the stock will halt from December 30.
The move follows insolvency proceedings initiated against the company, although NCLAT has stayed the NCLT order.
In an exchange filing, Polycab India said the National Company Law Appellate Tribunal had stayed and kept in abeyance the October 7 order passed by the National Company Law Tribunal, Ahmedabad Bench, admitting the corporate insolvency resolution process against the company in a case filed by Asier Metals Pvt. Ltd. The proceedings relate to an alleged Rs 2.8 crore operational debt.
Brokerage Motilal Oswal said Polycab will likely be removed from the MSCI index as the firm's policy dictates excluding stocks under insolvency procedures. Existing constituents undergoing insolvency, which are a part of one of MSCI indices, enter an ineligible alert board and are deleted on the last business day of the month, the brokerage noted, reported Informist.