United Breweries (UB) group stocks were, on Friday, bear-hammered as the revival of Kingfisher Airlines came under a cloud after banks refused to give a lifeline.
The lack of clarity on the United Sprits-Diageo deal, and the downgrading of United Sprits’ loan by credit rating agency ICRA to junk caused negative sentiment resulting in the sell-off.
United Sprits plunged by 4.61 per cent to close at Rs.1,218, while United Breweries closed with a loss of 7.59 per cent at Rs.653.10 on the Bombay Stock Exchange (BSE).
United Breweries Holding lost 8.35 per cent in value to close at Rs.133.85. Following high volatility of this stock, the BSE had, on Thursday, reduced the circuit limit to 10 per cent from 20 per cent earlier.
The Kingfisher Airlines stock has also been put under a 5 per cent circuit limit to prevent high fluctuation. The stock, on Friday, plunged 4.95 per cent and got locked in the lower circuit filter at Rs.16.12. Without the circuit filter, the stock could have fallen much below. The Kingfisher stock was on a rise in the last few sessions with the hope that the airline would be revived with funds coming in from foreign airlines which are now allowed by the Union Government to invest in Indian carriers.
Speculations over global spirits company Diageo acquiring controlling stake in United Spirits and the proceeds being canalised to revive Kingfisher Airlines also gave mussels to the battered stock. Now that UB Group Chairman Vijaya Mallya has reportedly denied any move to utilise United Spirits’ money to revive the ailing Kingfisher, the stock is finding its own level.