The company stock was under selling pressure on Friday. At around 10.40 AM, Madhav Copper Ltd. stock was trading at Rs48.80 per piece down Rs2.65 or 5.15% on the NSE.
“The rating action follows alleged evasion of Rs137cr goods and service tax (GST) by MCL. Pursuant to the matter, the state goods and service tax (SGST) department has temporarily seized MCL's land, bank accounts, stocks by following continued absence of Nilesh Patel (Chairman) from meeting the authorities despite summons,” the company shared CRISIL’s rating rationale on Thursday.
It further said, as per the management, the case is currently subjudice and the impact and outcome of the event is uncertain. The rating action reflects the heightened management risk and adverse ruling or imposition of any material penalties shall remain key monitorable.
The rating reflects MCL's moderate financial profile and significant scale up in operations. These strengths are partially offset by a modest operating margin and vulnerability to fluctuations in raw material prices, it said.