Shares of Eraaya Lifespaces were locked in the 5% upper circuit limit for the second consecutive trading session on Wednesday, October 9, at ₹2,888 after the company released an update on recent legal developments involving its subsidiary Ebix Singapore and Ernst & Young (E&Y).
The statement indicates that Mr Robin Raina assigned a mandate to Ernst & Young to raise funds through the sale of Ebix Singapore's assets, including those of Ebix Cash India, in an attempt to avoid financial collapse, despite the ongoing Chapter 11 proceedings of Ebix Inc USA.
E&Y, acting on the mandate without fully understanding the situation, sought potential buyers and fundraising opportunities but failed to achieve any successful transactions. This confusion and complication arising from Mr Raina's action prompted E&Y to initiate legal proceedings against Ebix Singapore in the Hon’ble High Court of Delhi, the company said.
"Although a claim was filed by E&Y, after the Eraaya and Ebix teams engaged with E&Y and presented the true facts about the insolvency proceedings, E&Y opted to withdraw their petition, and the matter has since been amicably resolved. There is currently no pending litigation between Eraaya, Ebix, or any of the group's subsidiaries, and no adverse financial consequences for any of the parties involved and related to this matter," the company said in a regulatory filing on Tuesday.
In another positive development, Ebix Cash recently secured a significant contract for Network Integrating Services from Punjab National Bank (PNB), valued at approximately ₹138.75 crore for a three-year term.
Since 2021, Ebix has been managing PNB’s enterprise-wide network throughout India. This contract covers PNB’s extensive infrastructure, which includes 10,800 branches, 5,000 ATMs, and 4,000 branches of PNB-sponsored Regional Rural Banks.
Additionally, Ebix Cash will oversee the state-of-the-art Data Centre in Delhi, the Advanced Network Operations Centre, and the Disaster Recovery Centre in Mumbai, along with 13 zonal offices and 131 circle offices, as stated in the company's regulatory filing on Monday.
The stock has consistently reached the 5% upper circuit limit in recent months, providing impressive returns to shareholders. Over the past year, it has surged 7,700%, and in the last two years, it has delivered an astonishing return of 36,839%. Over the past five years, the stock has increased by 38,008%.
As of the end of August 2024, the general public holds the majority stake in the company at 46.1%, while promoters own 36.2% and foreign institutional investors (FIIs) hold 17.7%, according to Trendlyne shareholding data.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
