SBI shares jumped 5% on BSE in early trade. (Mint)
SBI shares jumped 5% on BSE in early trade. (Mint)

Bank stocks surge after Supreme Court's order on Essar Steel insolvency

  • State Bank of India (SBI), which has an exposure of more than 13,600 crore to Essar Steel, jumped 5% on BSE in early trade
  • ICICI Bank, which has an exposure of over 2,500 crore, jumped nearly 2%

New Delhi: BSE Bankex rose 1.15% as the Supreme Court set aside National Company Law Appellate Tribunal (NCLAT) order that operational creditors should be treated on par with financial creditors in the Essar Steel insolvency case.

The verdict paves the way for ArcelorMittal’s takeover of the bankrupt company.

State Bank of India (SBI), which has an exposure of more than 13,600 crore to Essar Steel, jumped 5% on BSE in early trade. ICICI Bank, which has an exposure of over 2,500 crore, jumped nearly 2%.

Canara Bank which has an exposure of more than 3,900 crore, went up by 3.5%. Corporation Bank with an exposure of over 1,600 crore, surged 12% on the BSE.

Other creditors including Punjab National bank (PNB), IDBI, and Bank of India went up by 3.5%, 5% and 5.5% individually.

Nifty Bank was 0.6% up at 30,941.40 points.

The committee of creditors (CoC) had filed petitions against NCLAT’s judgment, challenging that they should recover more than operation creditors in the bankruptcy resolution process.

The SC decision overrules NCLAT’s July 5 judgment that operational creditors should be treated on a par with financial creditors for distribution of funds from ArcelorMittal’s bid in the Essar Steel insolvency case. As of July, total debt in the Essar Steel case had inflated to 69,192 crore following fresh claims by some operational creditors, the court had said.

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