The shares of the largest manufacturer of BOPET and BOPP films fell by 3% after the company’s minority shareholders filed suit with the National Company Law Tribunal (NCLT) for fund mismanagement.
With a market capitalization of Rs 2,376.95 crore, the shares of Jindal Poly Films Ltd closed at Rs 542.85 per share, increasing around 1 percent as compared to the previous closing price of Rs 548.30 apiece.
According to CNBC Report, Jindal Poly Films Ltd minority shareholders filed a claim with the National Business Law Tribunal (NCLT) alleging financial siphoning to promoters, resulting in a staggering loss of about Rs 2,000 crore to the business.
According to the complaint, between 2013 and 2017, Jindal Poly Films allegedly invested Rs 700 crore in two associated entities, Jindal India Powertech Limited, and Jindal India Thermal Power Ltd, using instruments such as Optionally Convertible Preference Shares (OCPS) and Redeemable Preference Shares (RPS).
Surprisingly, these assets were written off almost immediately, causing considerable worries among investors, according to the complaint.
Additionally, It was further revealed that Jindal Poly Films invested Rs 1,300 crore in tranches when the chips prices were down, and then allegedly sold its shares in the related entities to a promoter group trust for a mere Rs 106 crore when the fortunes of the power sector began to improve.
Moreover, Jindal Poly Films suffered an estimated Rs 2,000 crore loss due to this decision, which was seen as damaging to minority shareholders’ interests.
Looking into the company’s finances, Jindal Poly Films Ltd.’s revenue increased by 11 percent from Rs 887 Crore in Q3FY23 to 984 Crore in Q3FY24. During the same period, net loss increased from Rs 97 crore to Rs 19 crore.
Jindal Poly Films Limited is an India-based firm that manufactures and sells packaging films. Flexible Packaging Film and Nonwoven Fabrics are among the company’s business segments. The company manufactures biaxially oriented polyethylene terephthalate (BOPET) and polypropylene (BOPP) films.
Written by:- Abhishek Singh
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