Shares in Kingfisher Airlines fell by their daily limit of 5 per cent for a second day in a row after lenders said they would initiate recovery proceedings against the defaulting carrier.
The stock was down 4.9 per cent at Rs 10.06 as of 10.10 a.m. underperforming other airline stocks such as Jet Airways (up 0.9 per cent) and SpiceJet (up 1 per cent).
Kingfisher lenders have started the process of recovering Rs 7,500 crore outstanding loans from the grounded airline. The decision was taken at a Tuesday meeting attended by the consortium of lenders and the airline's management, which included CEO, Sanjay Agarwal, and UB Group president and CFO, Ravi Nedungadi.
State Bank of India has the maximum exposure of Rs 1,600 crore, followed by Punjab National Bank (Rs 800 crore), IDBI Bank (Rs 800 crore), Bank of India (Rs 650 crore) and Bank of Baroda (Rs 550 crore).
Kingfisher has been grounded since October 1 last after a labour unrest due to non-payment of salaries which have not been paid since last May.
Shares in other firms promoted by Vijay Mallya also traded sharply lower. United Breweries Holdings, the parent company of Kingfisher Airlines, traded 5 per cent lower at Rs 66.75, while United Breweries traded 1.8 per cent lower at Rs 631.
United Spirits bucked the trend and traded with nearly 1 per cent gains at Rs 1,879.