Kwality melts into a mess

about 5 months ago
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Kwality, despite enjoying a strong brand equity is a penny stock, with its 52-week high and low at Rs.5.97 and Rs.1.25 respectively. The stock is today locked at the 5% LC at Rs.2.77, with almost 5 lakh pending sell orders. Market cap is Rs.67 crore and promoters stake is paltry at 24%.

The stock is locked in the LC on news that CBI has registered a case against the company and its directors for fraud – they have allegedly cheated a consortium of banks of around Rs.1400 crore.

CBI said, the case was for, “"diversion of bank funds, sham transactions with related parties, fabricated documents".

Four years ago, KKR and Co had put in Rs.520 crore in the company for expansion and part repayment of debt but in 2018, the Indian arm of KKR initiated bankruptcy proceedings against Kwality.

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