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GTL at 63-month low; the fall and rise and fall of the co

Shares of GTL, formerly Global Telesystems, crashed 62% to close at Rs 127.80, its lowest closing in over five years, struck by multiple theories, none of which could be confirmed. Shares of group company GTL Infrastructure closed at Rs 16.85, down 43.27% over the previous close.

June 21, 2011 / 09:36 AM IST
 
 
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Moneycontrol Bureau


Shares of GTL, formerly Global Telesystems, crashed 62% to close at Rs 127.80, its lowest closing in over five years, struck by multiple theories, none of which could be confirmed. Shares of group company GTL Infrastructure closed at Rs 16.85, down 43.27% over the previous close.


GTL chairman and managing director Manoj Tirodkar blamed the bruising decline in his stocks to "speculative attack", but his answers to CNBC-TV18 were not convincing enough to attract bargain hunters.


Over 7.32 crore shares of GTL were traded on both exchanges combined, nearly 75% of the equity base of the company, and 1.6 times the non-promoter holding.


There was talk that the company was facing a liquidity crisis, that lenders had liquidated shares pledged by the promoters, that a major Mauritian shareholder had pulled out, that the company was struggling to raise capital, and that it had defaulted on interest payment to banks and institutions. Tirodkar denied all these.


"The fundamentals of the business are strong and will remain," Tirodkar told CNBC-TV18. "We will continue to build it as we did in the past whenever there have been any problems," he said.


But the stock closed near the low for the day, indicating that investors are not convinced.


Tirodkar was evasive when asked whether his firm was facing liquidity problems.


"Post 2G scam, issues in India concerning telecom companies have been generally bad. As a result, raising funds for any telecom companies including debt or equity has been extremely difficult," he said.


"Show me a single company in the telecom sector today which doesn't have issues. In the past, almost every major company has got those issues. New capital inflow into telecom sector has been a matter of concern largely due to what is happening on the interest rates front. Same thing happened in Europe and USA," he said.


Volatility in the company's stock is not new to Tirodkar, who set up Global Telesystems in 1987 as a reseller of telecom equipment.

During the technology stocks-led rally of 1999-00, GTL



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first published: Jun 20, 2011 04:50 pm