SBI Loan Default: The money trouble has caused problems for PC Jewellers, leading to a significant drop in their earnings during the second quarter of the 2024 fiscal year.
The State Bank of India (SBI) has recently taken control of two valuable properties in New Delhi previously owned by PC Jeweller. This action was prompted by PC Jeweller’s substantial default of over Rs 3,466 crore, a financial crisis that came to light in October. As a consequence of this significant setback, PC Jeweller is now facing operational disruptions.
The impact of the financial troubles is noticeable, especially in their second-quarter revenues for the fiscal year 2024. There has been a sharp decline in earnings for PC Jeweller during this period. The combination of the loan default and the subsequent takeover of properties by SBI has created a challenging situation for PC Jeweller, affecting both their financial stability and day-to-day operations.
SBI wants to get back Rs 1,267 crore.
SBI is seeking Rs 1,267 crore from PC Jeweller as part of its effort to recover some of the Rs 1,168.90 crore the company owes. To achieve this, the bank is taking strategic steps within the legal framework. SBI is utilizing institutions like the National Company Law Tribunal (NCLT) and the Debt Recovery Appellate Tribunal, actively navigating legal avenues to facilitate the recovery process.
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The financial difficulties faced by PC Jeweller have significantly impacted its overall business performance. Comparing this quarter to the same period last year, where the company earned Rs 836 crore, there’s been a dramatic decline in Q2 FY24 revenues, plummeting to just Rs 33 crore. This substantial downturn in revenue has also led to reported losses totaling Rs 152 crore for PC Jeweller. These challenges highlight a stark contrast from the more favorable financial position the company experienced in the previous year.
17 stores closing due to losses.
Facing the crisis, PC Jeweller is taking strategic actions, such as shutting down seventeen stores, including fourteen they own and three franchises. At the same time, the company is in talks with different banks to settle debts without going to court. The challenges PC Jeweller is dealing with reflect larger issues in the Indian jewelry sector, especially regarding credit and market trust.