GVK Power stock gains 16% as firm seeks shareholders' nod to raise loan limit

Shares of GVK Power & Infrastructure settled the day 16 per cent up in Friday's trade after the company sought shareholders' approval for increasing the maximum limit of loans and guarantees that can be given to other entities to Rs 15,000 crore.

The current limit of loans and guarantees is Rs 10,000 crore.

Reacting to the development, the stock added as much as 19.83 per cent to Rs 5.80 on BSE but settled the day 15.91 per cent higher.

In a filing to the BSE, the company said it has sought approval of the shareholders through postal ballot for increasing the existing "overall limits by Rs 5,000 crore for making investments/giving loans/guarantees/providing securities in terms of Sec 186 of the Companies Act, 2013 read with Rule 13 of Companies (Meetings of Board and its Powers) Rules, 2014."

Section 186 pertains to certain transactions entered into by a company directly or indirectly. These include loans given to any person or other body corporate and guarantee or security provided in connection with a loan to any entity.

The last date for voting on the postal ballot is July 7, the filing said.

A diversified group, GVK saw its net loss widen to Rs 407.70 crore for the latest March quarter.