NEW DELHI: Shares of Eros International Media hit a fresh all-time low in Monday's session and looked on course to extend their losing streak into the fourth consecutive session.The stock tanked 10 per cent to Rs 40.95 and hit its lower circuit limit.
In the last four sessions, the stock has come off 38 per cent.Shares of the company have been falling since last Tuesday.
On Wednesday, rating company CARE cut its creditworthiness, citing delays or likely defaults in serving debt availed from banks.
CARE lowered the long-term loan facilities to D or default from BBB-, a plunge in grades by several notches reminiscent of the sharp downgrades at infrastructure conglomerate IL-FS.
The downgrade is likely to hit the companys fundraising plans.
Even as Eros was making efforts to assuage investor concerns, a US-based forensic financial research firm said much of the receivables that the company had claimed might not be existing, and accused its promoters of engaging in highly irregular related party transactions which appear designed to hide receivables.
As per an ET report, Hindenburg Researchs June 7 report said the companys auditors, Grant Thornton, failed to apply even basic scrutiny to Eros financials, and said the price of both the BSE and NYSE stock (of the company) to end up worthless, barring some sort of bailout from a friend of Eross leadership.
A Grant Thornton India spokesperson told ET that it was a short sellers report and that it was examining its contents.
However, Eros chairman Kishore Lulla said there was no truth in the allegations and that the company was seeking advice on legal action against the research firm.
Both Grant Thornton and Lulla said the allegations were similar to those raised in a previous short-seller report and found to be without substance after an investigation.