After the Supreme Court delivered its verdict on Essar Steel insolvency case on Friday (15 November), an upward trend is being witnessed in shares of public sector banks (PSU banks), reports News 18.
The Nifty PSU Bank index climbed as high as 5 per cent during the day. As per reports, State Bank of India (SBI), which has an exposure of more than ₹13,600 crore to Essar Steel, jumped 5 per cent on BSE in early trade. ICICI Bank, which has an exposure of over ₹2,500 crore, jumped nearly 2 per cent.
Notably, the Supreme Court allowed the plea of Committee of Creditors of Essar Steel India and set aside the National Company Law Appellate Tribunal (NCLAT) order on insolvency proceedings against the steel giant.
The NCLAT ruling had emphasised on equal distribution of proceeds between financial and operational creditors.
The bench headed by Justice Rohinton Nariman observed that the adjudicating authority and tribunals should not interfere in commercial decisions taken by Committe of Creditors, and if fact, at best ask the CoC to reconsider its decision and balance the interest of all stakeholders.
The apex court also relaxed the timeline of 330 days in order to find a resolution of stressed assets under the IBC, and if possible NCLAT can extend the timeline.
The court ruling potentially clears the decks of Essar Steel's takeover by ArcelorMittal. In July, the apex court had put on hold Essar Steel's sale to ArcelorMittal, after it agreed to hear appeal filed by lenders against NCLAT order, and then observed that the court will finally settle this issue.
In August, Parliament approved the changes in IBC giving more clarity over distribution of proceeds of the auction of companies which defaulted on loan.
(With Inputs from IANS)
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.