Edelweiss Stock Plunges 14% After RBI Restrictions
By Rediff Money Desk, New Delhi May 30, 2024 12:22
Edelweiss Financial Services stock plummeted over 14% after the RBI imposed business restrictions on its lending and asset reconstruction arms due to concerns over evergreening of loans.
![Edelweiss Stock Plunges 14% After RBI Restrictions](https://im.rediff.com/money/2024/may/29may-edelweiss.jpg)
Photograph: Eieleien/Wikimedia Commons
New Delhi, May 30 (PTI) Stock of Edelweiss Financial Services tumbled more than 14 per cent on Thursday after the Reserve Bank imposed business restrictions on Edelweiss Group's lending and asset reconstruction arms on concerns over evergreening of loans.
On the NSE, shares of Edelweiss Financial Services nosedived 14.53 per cent to trade at Rs 66.20 apiece.
The scrip of the company declined 14.45 per cent to Rs 66.26 on the BSE.
Meanwhile, the 30-share BSE Sensex plunged 476.05 points to trade at 74,026.85, while the broader NSE Nifty fell 152.80 points to 22,551.90.
On Wednesday, the Reserve Bank of India (RBI) imposed business restrictions on Edelweiss Group's lending and asset reconstruction arms on concerns over evergreening of loans.
The central bank has asked ECL Finance Ltd (ECL) to cease and desist from undertaking any structured transactions in respect of its wholesale exposures, other than repayment and/or closure of accounts, RBI said.
In the case of Edelweiss Asset Reconstruction Company Ltd (EARCL), the RBI has asked the entity to cease and desist from the acquisition of financial assets, including Security Receipts (SRs) and reorganising the existing SRs, into senior and subordinate tranches.
Both the actions are with immediate effect, it added.
In the recent past, the RBI had flagged concerns around the Alternative Investment Funds (AIFs) being used for evergreening of loans and asked financiers to set aside more money for such investments.
However, Edelweiss ARC (Asset Reconstruction Company) said it is reviewing the RBI order and assured that it will address the observations mentioned in the RBI order.
"There will not be any material impact on the company's resolution and recovery efforts which would continue normally," Edelweiss ARC said in a statement on Wednesday.
"We are dedicated to maintaining transparency and upholding the highest standards of corporate governance and committed to compliance with regulatory requirements," it added.
On the NSE, shares of Edelweiss Financial Services nosedived 14.53 per cent to trade at Rs 66.20 apiece.
The scrip of the company declined 14.45 per cent to Rs 66.26 on the BSE.
Meanwhile, the 30-share BSE Sensex plunged 476.05 points to trade at 74,026.85, while the broader NSE Nifty fell 152.80 points to 22,551.90.
On Wednesday, the Reserve Bank of India (RBI) imposed business restrictions on Edelweiss Group's lending and asset reconstruction arms on concerns over evergreening of loans.
The central bank has asked ECL Finance Ltd (ECL) to cease and desist from undertaking any structured transactions in respect of its wholesale exposures, other than repayment and/or closure of accounts, RBI said.
In the case of Edelweiss Asset Reconstruction Company Ltd (EARCL), the RBI has asked the entity to cease and desist from the acquisition of financial assets, including Security Receipts (SRs) and reorganising the existing SRs, into senior and subordinate tranches.
Both the actions are with immediate effect, it added.
In the recent past, the RBI had flagged concerns around the Alternative Investment Funds (AIFs) being used for evergreening of loans and asked financiers to set aside more money for such investments.
However, Edelweiss ARC (Asset Reconstruction Company) said it is reviewing the RBI order and assured that it will address the observations mentioned in the RBI order.
"There will not be any material impact on the company's resolution and recovery efforts which would continue normally," Edelweiss ARC said in a statement on Wednesday.
"We are dedicated to maintaining transparency and upholding the highest standards of corporate governance and committed to compliance with regulatory requirements," it added.
Source: PTI
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- GTL Infrastructure
- 2.93 ( -4.87)
- 226206286
- IFL Enterprises
- 1.30 (+ 4.84)
- 81461564
- Vodafone Idea L
- 16.79 (+ 0.66)
- 67447398
- NCL Research
- 0.95 ( -4.04)
- 31996628
- Franklin Industries
- 3.73 (+ 3.32)
- 21511209
MORE NEWS
![Navi Mumbai...](https://im.rediff.com/80-80/money/2021/jun/10navi-mumbai-airport7.jpg)
Navi Mumbai Airport ILS Signal Testing Begins
The Airports Authority of India (AAI) has begun ILS signal testing at the...
![Air India VRS for...](https://im.rediff.com/80-80/money/2020/sep/09tata-vistara-3.jpg)
Air India VRS for Non-Flying Staff Ahead of...
Air India has announced a voluntary retirement scheme (VRS) and voluntary separation...
Fisher Groups Oppose WTO Fisheries Subsidy Talks
Small-scale fisher groups from India, Indonesia, and Bangladesh demand WTO keep...