Shares of Shriram Transport Finance came under huge selling pressure today, plunging nearly 12 per cent, amid concerns over the group's ability to repay holders of certain debentures.
The stock tanked 11.83 per cent to settle at Rs 1,144.85 on BSE. During the day, it tumbled 19.34 per cent to Rs 1,047.20.
At NSE, shares of the company slumped 11.70 per cent to close at Rs 1,145.25.
The company's market valuation also declined Rs 3,482.18 crore to Rs 25,976.82 crore.
In terms of equity volume, 10.27 lakh shares of the company were traded on BSE and over one crore shares changed hands at NSE during the day.
In a clarification to BSE today, the company said, Shriram Transport Finance Co had given corporate guarantee in connection with issue of non-convertible redeemable debentures issued by SVL in June 2015.
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Apart from this corporate guarantee, STFC has not extended any fresh guarantee for SVL, it said.
The corporate guarantee is secured by pledge of shares of SVL, the filing added.
"The NCDs fall due for maturity after a year from now in June 2019. SVL, its promoters / promoter group and its associates have enough resources to honour the payment of this loan whenever due and payable has reassured the same," the company said.
This guarantee was duly approved by the board of directors of STFC, it added.
The promoters of our company "will address through alternate mechanisms to settle the dues," if failing in settlement of the dues on or before the due date, according to the filing.
"The company has always adhered to highest corporate governance norms and best practices and would continue to do so in future to protect all stake holders interest," it added.