Tourism Finance Corporation of India (TFCI) has been paying the price of exposure to Cox & Kings. While Cox & Kings was locked at 5% LC for the sixth straight day today at Rs.31, TFCI had hit a LC yesterday at Rs.87.75 and today it hit a new 52-week low at Rs. 83.10. But after hitting the low, it bounced back and is now almost 7.5% up at Rs.94.85.
Concerns emerged on news of TFCI’s exposure to Cox & Kings to the tune of Rs.60 crore. The management has issued a statement conveying that it had no cause to worry as it has sufficient cover.
The company stated that the exposure is covered with twice the amount. It said, “the loan, repayable over a period upto three years, is standard in our books and is adequately secured by way of charge on tangible current assets & mortgage of fixed assets of the borrower company besides pledge of shares of its associate company having substantial intrinsic value and thus TFCI has adequate substantive security.”
The market seems to be happy with this statement and that’s why we see the bounce back from the lower value.