 "Nitco shares hit 5% upper circuit; Here's what's driving the stock higher")
Nitco shares advanced 5 per cent on Friday, October 18, and froze in upper circuit at Rs 120.87 per share on the BSE. The stock gained after the company informed that it has signed a one time settlement (OTS) with Life Insurance Corporation of India (LIC) for its debt facilities. Apart from that, it has also sigend a memorandum of intent of settlement with its financial creditor Authum Investment and Infrastructure.
At around 9:56 AM, Nitco shares were up 4.33 per cent at Rs 120.11 per share on the BSE. In comparison, the BSE Sensex was down 0.55 per cent at 80,563.14 around the same time. The market capitalisation of the company around the same time stood at Rs 862.67 crore.
As per the company's exchange filing, LIC has approved the settlement proposal; and Nitco has repaid its entire outstanding dues with LIC.
"The company (Nitco) on October 4, 2024, had proposed a One-time settlement for its entire dues to LIC, which was subsequently approved subject to execution of necessary documents and receipt of consideration. Considering the said approval, the company paid the OTS amount on October 16, 2024," the exchange filing stated.
Additionally, in another exchange filing, Nitco informed that it has signed a memorandum of intent of settlement with Authum Investment and Infrastructure.
"The learned counsel for the Financial Creditor has submitted that both the parties have finally been able to resolve the matter. The parties have entered into the memorandum of intent of settlement dated 24.09.2024, the learned counsel submits that in the settlement, the amount being paid to the Financial Creditor is exactly the same as was claimed in the company petition agreed to be paid to the petitioner which is Rs 63,30,08,916.47 (Rs 63.3 crore)," the filing read.
"The learned counsel for the Financial Creditor has submitted that both the parties have finally been able to resolve the matter. The parties have entered into the memorandum of intent of settlement dated 24.09.2024, the learned counsel submits that in the settlement, the amount being paid to the Financial Creditor is exactly the same as was claimed in the company petition agreed to be paid to the petitioner which is Rs 63,30,08,916.47 (Rs 63.3 crore)," the filing read.
It added: "The counsel prays for withdrawal of the company petition. Let the company petition be disposed of as having been withdrawn along with all the pending I.A. if any."
The company had been dragged to the NCLT, Mumbai bench, for insolvency proceeding by JM Financial Asset Reconstruction, which was owed Rs 73.5 crore. However, JM Financial ARC had sold its debt to Authum Investment and Infrastructure, following which Nitco had entered into a memorandum of intent of settlement with it.
The company had been dragged to the NCLT, Mumbai bench, for insolvency proceeding by JM Financial Asset Reconstruction, which was owed Rs 73.5 crore. However, JM Financial ARC had sold its debt to Authum Investment and Infrastructure, following which Nitco had entered into a memorandum of intent of settlement with it.
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In the past one year, Nitco shares have gained 472 per cent, compared to the BSE Sensex's rise of 23 per cent during the same period.