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Koutons Retail dives to record low as ICRA suspends rating

This article was posted on Sep 30, 2010 and is filed under Market News

Koutons Retail India was frozen at the 20% lower circuit at Rs. 172.70 at 09:05 IST on BSE, extending Wednesday’s 20% plunge, on reports a credit rating agency has suspended its ratings assigned to the retailer citing absence of requisite information.

Meanwhile, the BSE Sensex was up 2.60 points, or 0.01%, to 19,958.94

On BSE, 38,593 shares were traded in the counter with pending sell orders of 4.75 lakh shares at the lowest level. Its average daily volume is 44,424 shares in the past one quarter.

The stock is currently at record low levels. It hit a high of Rs. 175.55 at the onset of the trading session. The stock had hit a 52-week high of Rs. 451 on 2 February 2010.

The small-cap apparel retailer has an equity capital of Rs. 30.55 crore. Face value per share is Rs. 10.

The Koutons Retail India stock slumped 20% to Rs. 215.85 on 29 September 2010 after credit rating agency ICRA reportedly suspended its LB+/A4 ratings assigned to Rs. 300-crore fund based facilities of the retailer. The suspension of rating by ICRA was because of the rating agency’s inability to carry out a rating surveillance in the absence of the requisite information from the company, ICRA said in a statement.

An ICRA analyst was quoted by the media as saying that Koutons was unable furnish detailed financial information which ICRA would typically require to take a rating action. The report added that ICRA has not received the company’s annual report for the year ended March 2010 (FY 2010) and only ‘broad indicators’ posted on the National Stock Exchange website were available.

In another development, Anuj Kumar has joined Koutons Retail as vice-president (Finance & Accounts).

A separate media report suggested that Koutons Retail’s promoters have pledged shares for the second time in the last three weeks. Koutons promoters, who hold a 63.9% stake in the company, have pledged as much as half of their stock. The company has begun to default on loans, including a facility provided by Kolkata-based Allahabad Bank, according to the report.

Koutons Retail India’s net profit fell 49.9% to Rs. 5.51 crore on 20.2% decline in net sales to Rs. 160.65 crore in Q1 June 2010 over Q1 June 2009.

source: India Infoline

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