Shares of Union Bank of India gained the most in nearly three months on a report of its plan to sell its KSK Mahanadi exposure.
The lender, the second largest creditor to KSK Mahanadi Power, put its Rs 2,077-crore outstanding loan to the company on the block, the Economic Times on Wednesday reported citing an auction notice.
Union Bank of India, according to the report, has set a reserve price of Rs 919 crore in cash for its exposure, with an estimated recovery of 44% (of outstanding amount). The last date for expression of interest from buyers is Aug. 31. The electronic auction will taken place on Sept. 1.
Union Bank of India has yet to respond to BQ Prime's emailed queries.
Already, State Bank of India, Punjab National Bank, Bank of Baroda and Axis Bank sold their debt in the company, which has been under the insolvency process for years.
KSK Mahanadi was admitted to bankruptcy in October 2019 after a complaint by Power Finance Corp. KSK Mahanadi has admitted claims of Rs 29,501 crore from lenders.
Shares of Union Bank of India rose nearly 8% in intraday trade before closing with 4.6% gains, the most in nearly three months.
The trading volume was more than quadruple the 30-day average, when markets closed.
The share price crossed above the 200-day simple moving average, indicating potential upward price momentum.
The stock extended winning streak for the second day.
Of the seven analysts tracking the company, three maintain a 'buy', and two each suggest a 'hold' and a 'sell', according to Bloomberg data. The 12-month consensus price target implies a downside of 3.9%.
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