Bombay Burmah Trading, Britannia, 2 other Wadia Group stocks tank up to 10% after Go First's bankruptcy filing

Wadia Group stocks such as Bombay Burmah Trading Corp Ltd, Bombay Dyeing, Britannia Industries and National Peroxide tanked up to 10 per cent in Wednesday's trade after Go First (formerly known as GoAir) filed for bankruptcy. Shares of Bombay Burmah dived 9.62 per cent to hit a day low of Rs 940 over its previous close of Rs 1,040. However, the stock halved its losses in late-morning deals to trade 4.56 per cent lower at Rs 992.60.

On the technical front, support on the counter could be seen at Rs Rs 936, followed by Rs 920, Rs 900 and Rs 870 levels, analysts said.

"The stock has recently witnessed an upsurge from the lows of the Rs 780-odd zone and soared above the Rs 1,000 mark. However, the overall trajectory remains sideways and until it surpasses the Rs 1,050 zone, it is likely to hustle in between. As far as levels are concerned, Rs 920-900 is the immediate support, followed by sacrosanct support of Rs 870. While on the higher end, Rs 1,050 is likely to act as a sturdy hurdle in the comparable period," said Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One.

"Bombay Burmah's stock price looks bearish on the daily charts with strong resistance at 1,040. A daily close below the support of Rs 936 could lead to targets of Rs 910-840 in the near term," said AR Ramachandran from Tips2trades.

"Since the last one and half months, the said counter has reversed from its lower level of Rs 781. One can buy at the current market price with a target of Rs 1,200 and the stop loss would be placed at Rs 892," said Jigar S Patel - Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers.

In addition, Wadia Group's flagship company Bombay Dyeing slipped 6.17 per cent to Rs 86.12 today. The counter was last seen trading 1.29 per cent down at Rs 90.61. Also, Britannia Industries and National Peroxide fell up to 3.10 per cent.

Budget airline Go First owes financial creditors Rs 6,521 crore, according to its bankruptcy filing. "Currently, the assets of the company are not sufficient to meet its liabilities," the airline stated.

The airline's total liabilities to all creditors came at Rs 11,463 crore. This includes dues to banks, financial institutions, vendors and aircraft lessors.

Go First's financial creditors included the Central Bank of India, Bank of Baroda, IDBI Bank, Axis Bank and Deutsche Bank.

The Central Bank and Bank of Baroda have an exposure of Rs 1,300 crore, respectively under a consortium loan, while IDBI Bank has a smaller exposure of Rs 50 crore, the bankruptcy filing showed.

Go First has also borrowed Rs 1,292 crore under the Centre's emergency credit scheme introduced during the Covid crisis.

The carrier has defaulted on payments to operational creditors, including Rs 1,202 crore to vendors and Rs 2,660 crore to aircraft lessors.

It has received notices from lessors for termination of aircraft lease agreements and some have started actions against the company to ground or repossess aircraft, the filing further mentioned.

The airline's promoters infused funds worth Rs 3,200 crore in the last three years, out of which Rs 2,400 crore was pumped in the last 24 months, and Rs 290 crore in April. "This brings the total investment in the airline since its inception to approximately Rs 6,500 crore," Go First said.

The airline said that it has been forced to file for insolvency proceedings due to the "serial failure" of Pratt & Whitney to supply engines, resulting in the grounding of 50 per cent of its fleet, rendering it difficult to meet its financial obligations.

Pratt & Whitney, in response, said that Go First has a long history of missing payments.

Meanwhile, Indian equity benchmarks traded lower in today's session, dragged by banks, financials, technology and metal stocks.