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Throwing a lifeline

Venugopal Dhoot, chairman of Videocon has bought close to 50 lakh shares in the company

Soumik Kar

Videocon chairman Venugopal Dhoot has bought close to 50 lakh shares in the company at ₹198 levels over the past one month through group company Nippon Investment & Finance, which has since increased its stake from 3.1% to 4.6%. Incidentally, the promoters, who hold 67.83% stake in the consumer durables-to-telecom company, have pledged more than half of their holdings. Though the stock has more than doubled from its low of ₹87 in March 2009 to current levels of ₹212, it has been floundering since hitting a high of ₹823 in early 2008. Today, the company has slipped into the red with a consolidated loss of ₹1,363 crore for the year ended December 2012 even as sales slipped 9% to ₹13,415 crore. What has proved to be a drag on the bottomline is the overall debt of over ₹27,000 crore. In fact, in the last quarter, Videocon incurred a finance cost of over ₹400 crore. It has invested over ₹4,000 crore in its telecom foray, but had to shut down services in 11 circles after the Supreme Court cancelled several telecom licences in wake of the 2G scam. 

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