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Why UCO Bank, Corporation Bank shares zoomed up to 19% in intraday trade

Shares of UCO Bank and Corporation Bank rallied up to 18 per cent in early deals on Friday amid reports that creditors to the bankrupt firm would receive payment soon

twitter-logo BusinessToday.In   New Delhi     Last Updated: December 13, 2019  | 13:37 IST
Why UCO Bank, Corporation Bank shares zoomed up to 19% in intraday trade
Shares of UCO Bank gained as much as 18.42 per cent to hit an intraday high of Rs 18 on the BSE

Shares of state-owned lenders, UCO Bank and Corporation Bank, jumped up to 19 per cent in early deals on the Bombay Stock Exchange (BSE) on Friday amid reports that creditors to the bankrupt firm would receive payment soon.

Cheering the news, shares of UCO Bank gained as much as 18.42 per cent to hit an intraday high of Rs 18 after opening higher at Rs 16 against previous closing price of Rs 15.20 on the BSE. There was also surge in volume trade as 3.98 lakh shares changed hand over the counter as compared to two-week average volume of 1.66 lakh shares.

In a similar trend, Corporation Bank share price was up 8.21 per cent at Rs 25.70 apiece on the BSE. The shares opened higher at Rs 25.30 and touched an intraday high of 27.20. The stock was trading 18 per cent lower than its 52-week high of Rs 32.15 touched on February 27, 2019.

Also Read: ArcelorMittal aims to complete Essar Steel acquisition by 2019-end

Last month, the Supreme Court had cleared the deck for ArcelorMittal to take over Essar Steel by accepting global steel giant's offer to pay an aggregate of Rs 42,000 crore as an upfront amount to the secured financial creditors of debt-laden firm. The apex court had set aside the July 4 National Company Law Appellate Tribunal (NCLAT) order giving equal status to financial creditors and operational creditors.

The Committee of Creditors to Essar Steel had approved the distribution of Rs 12,161 crore to State Bank of India, followed by Rs 2,282 crore to IDBI Bank, Rs 3493 crore to Canara Bank and about Rs 1,400 crore to Corporation Bank.

Also Read: Essar Steel verdict: How the SC ruling is a game-changer for future bankruptcy cases in India

Following the Supreme Court verdict on Essar Steel resolution plan, steel tycoon Lakshmi Mittal-led ArcelorMittal had said it expected to complete the acquisition of the bankrupt steel maker by the end of this year.

Essar Steel was auctioned under the new Insolvency and Bankruptcy Code to recover Rs 54,547 crore of unpaid dues of financial lenders and operational creditors.

Among others, shares of State Bank of India (SBI) and IDBI Bank gained between 3-5 per cent on the Bombay Stock Exchange.

Edited by Chitranjan Kumar

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