Kingfisher Airlines' stock closed 9.45 per cent lower at Rs 19.65 on Friday on the BSE after it cancelled flights amid a burgeoning crisis but recovered from the day's low of Rs 17.55 as the company has approached the Central Government for help.
Trading volume jumped five-fold to 72.65 lakh shares on the BSE against its two-week average of 13.98 lakh shares.
The Kingfisher development had a rub-off impact on the group's other stocks too. United Breweries Holdings slumped 9.68 per cent to Rs 89.15, United Spirits plunged 8.64 per cent to Rs 835.25 and United Breweries slipped 2 per cent to Rs 389.35. All these stocks witnessed higher trading volumes. “In case the loan restructuring is done, it would be a classic case of banks trying to deploy good money to recover their bad money,” said Mr Anand Tandon, Group CEO, JRG Securities.
“This could create a fresh set of non-performing assets for banks who do this.”
Stocks of State Bank, Bank of India, ICICI Bank, Punjab National Bank and IDBI Bank, which have sizeable exposure to the company, also sank at the bourses. Scores of passengers were inconvenienced after the private airline cancelled several flights amid reports of travel agents not taking bookings.