Trending Small Cap Stock: Is Monnet Ispat on the brink of bankruptcy?

Monnet Ispat’s debt has surged to Rs 12,500 crore due to the severe financial crunch and slowdown in the steel sector, made worse by drop in commodity prices and huge steel imports from China. With unending woes, the company has defaulted in its debt repayment, so is the company on the verge of bankruptcy?

The National Company Law Tribunal (NCLT) has accepted the case which was filed by SBI against Monnet Ispat for non-payment of debt after the confusion ended over the default amount. The SBI counsel claimed an amount of Rs 1539 crore on Tuesday, whereas the balance of Rs 704 crore is payable later as it not under the default list. 

Earlier, NCLT had warned SBI to take the case seriously as the claim amount of Rs 2243 was higher than the default of Rs 1539 crore, which was one of the 12 NPA accounts that were identified by the RBI. The final call on the case will be announced today by NCLT after the brief hearing session on Monday.

The company management has, however, no objections over the insolvency proceedings as they are already having an interested buyer in the form of JSW Steel which has offered to buy assets of Monnet.

Currently, the company is involved in the business activities of electric power generation through coal-based thermal power plants. 

In today's trade, the stock opened at Rs.32.95, touched high/low of Rs.34/Rs.32.05 and closed at Rs.33.