Nectar hits 2% UC

Nectar Lifesciences is a bis newsmaker today; The company announced that it has fully repaid and settled its secured debt, including accrued interest that it owed to its consortium of lenders. Following this repayment, a total charge of Rs.1,338.35 crore on the company’s immovable, movable, and current assets has been released by SBICAP Trustee Company, which acted as the security trustee for the consortium of banks.

This marks a major milestone in the company’s deleveraging journey, as Nectar Lifesciences is now effectively debt-free on its secured obligations. The release of charge signals that the company’s loans have been fully serviced and no longer carry bank encumbrances. This strengthens its financial flexibility and improves creditworthiness, opening the door for future funding at more competitive rates or equity-linked expansion plans.

For lenders, this development closes a long-standing exposure tied to the company’s earlier debt restructuring, while for the company it marks a balance-sheet cleanup following years of working-capital stress in the API (Active Pharmaceutical Ingredients) and formulations business.

The move is credit-positive, signalling a complete debt resolution and potential for re-rating if operating profits stabilize in coming quarters. However, be watchful for sector-wide margin pressure and competitive pricing in antibiotics may limit immediate earnings expansion, even as the balance sheet now provides greater room for operational turnaround.

Debt-free is music to every market investors ears. And naturally, the market reacted as best as it could – the moment it opened for trade from its close of Rs.13.31, it hit the 2% UC of the day at Rs.13.57.

The stock has a 2% price-band because it is categorized under the T-group / Trade-to-Trade segment (T2T) and this is assigned to stocks that’s have a low free float, are thinly traded or volatile or are under enhanced surveillance by the exchange to curb speculative activity.

Nectar has a relatively small public float and limited daily trading volume, leading to higher volatility potential. Also it was undergoing post-debt restructuring or major corporate events (like its recent debt repayment), which also explains the price band to prevent speculative spikes.