Gravita plunges 8 per cent on order termination

The stock of Gravita India dipped as the company reported that a major Rs. 300 crore order was terminated due to financial issues at the end of the Singapore-based contracting company. 

The company informed the exchanges that a contract worth Rs. 300 crore with Kyen Resources, Singapore for supply  of 18,000 MT of pure lead and lead bullion stands terminated. The order was received in March 2018. Gravita has already supplied around 3,800 MT of material to Kyen and the rest will be now diverted to some other customers. 

Kyen Resources is one of the many metals trading firms backed by Chinese companies. Kyen's parent company, Shenzhen Feima International Supply Chain, is not willing to finance further expansion of Kyen as it is experiencing financial headwinds.

Gravita management has ruled out any material impact of this termination on the company's financials. The company has an order book worth Rs. 260 crores for the supply of lead, aluminium and plastic products. 

Reacting to the development, the stock of  Gravita India was quoting Rs. 70.10 per share, down by 8.55 per cent. The stocked opened at Rs. 75.00 per share. Meanwhile, the benchmark index BSE Sensex was at 34,401.85, up by 24.86 or 0.07 per cent on Monday.