Shiv-Vani having a good run

Shiv-Vani Oil is on a pretty good run today. Opening higher at Rs.14,  the stock is locked now at the 5% upper circuit at Rs.14.25, with volumes going up almost 2.5 times. Its 52-week high stands at Rs.25.

The stock has jumped up on some news coming in on its Corporate Debt Restructuring (CDR) scheme. Apparently a consortium of lenders, through its IL&FS Trustee, despite a High Court order, went ahead and lent more to the company, around Rs.320 crore. This is once again a case of good money chasing bad, with banks lending more despite court orders. The stock is up today but one wonders how this could be good as more lending has only complicated matters more, what with its Rs.200 crore term loan from Bank of Maharashtra is already a part of the CBI probe.

Today, the total exposure of some 24 lenders stands at Rs.3200 crore, comprising of both private as well as public sector banks. The company is in a huge financial bind, with ONGC, its main client black listing the company and it filed its FY14 financials only yesterday, ending the fiscal with a net loss of Rs.690 crore.