Shares of Info Edge Ltd opened 9 percent lower on June 2 but quickly recovered and were trading marginally higher. The company said its subsidiary Allcheckdeals India Private Ltd's (AIPL) loan of Rs 280 crore to 4B Networks is fully impaired, indicating that the chances of recovering the loan amount are unlikely.
In the opening trade, the stock hit a low of Rs 3815.05 on BSE and fell as much as 9.5 percent. However, the stock quickly recovered and was trading at Rs 4233 on BSE, up 0.42 percent from its previous close.
Info Edge also announced its decision to initiate a forensic audit into 4B Networks, a proptech startup backed by Rahul Yadav. This move comes a quarter after Info Edge wrote down its entire investment in the company due to the lack of provided financial information.
Rahul Yadav, known for his role as the founder of Housing.com and subsequent controversial disagreements with investors that led to his departure from the company, had previously worked with Anarock before launching 4B Networks.
In light of the aforementioned challenges, AIPL has formally requested various information from 4B Networks and its current management. This includes specific details regarding financial transactions, transactions involving related parties, and other relevant aspects. However, Info Edge has stated that 4B Networks has consistently failed to provide the requested information and has remained unresponsive to multiple information requests made by AIPL.
During the fourth quarter ended March 2023, the firm reported a consolidated loss of Rs 503.19 crore, compared to net profit of Rs 719.51 crore a year ago. However, there was a positive growth in revenue from operations, with a 28 percent increase to Rs 604.78 crore in Q4 compared to Rs 472.94 crore last year.
Hitesh Oberoi, the Managing Director and Chief Executive Officer, acknowledged that the slowdown in IT hiring has impacted billing growth. Nevertheless, he expressed satisfaction with the performance of the firm's non-recruitment businesses and noted the overall strength of the economy outside of the IT sector.
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