Penny Stock Below Rs 7 Hits Upper Circuit After PSU Bank Withdraws NCLT Petition on OTS Settlement

Market participants may interpret this as a stabilizing factor for the company, as insolvency proceedings often pose significant financial and operational challenges

Indian markets recovered from lower levels and were seen trading with a modest dip in the final leg of Thursday’s session. However, the broader indices—Small-Cap and Mid-Cap—outperformed, each gaining over 1 per cent. Alongside the buying interest in these segments, market volatility eased, with the India VIX dropping by over 4 per cent.

Amid this broader market strength, Madhucon Projects Limited, a penny stock trading below Rs 7, hit the upper circuit following a significant corporate development.

In an official communication to the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), Madhucon Projects Limited disclosed an update regarding its ongoing case before the National Company Law Tribunal (NCLT).

Canara Bank, a financial creditor, decided to withdraw its insolvency petition against the company after negotiating a One-Time Settlement (OTS). The NCLT allowed the withdrawal but granted Canara Bank the liberty to reopen the case if Madhucon Projects Ltd. fails to comply with the agreed settlement terms.

With this development, the company has, for now, avoided insolvency proceedings. However, adherence to the OTS terms remains crucial, as any non-compliance could lead to a reopening of the case.

Market participants may interpret this as a stabilizing factor for the company, as insolvency proceedings often pose significant financial and operational challenges. Whether the stock will continue its upward trajectory remains to be seen, as market sentiment and compliance with the settlement terms will likely influence future price movements.

Disclaimer: The article is for informational purposes only and not investment advice