The State Bank of India (SBI) has taken control of two prime properties in New Delhi from PC Jeweller, a move prompted by the company's staggering default of over Rs 3,466 crore announced in October. This financial setback has triggered operational disruptions for PC Jeweller, as evidenced by a sharp decline in their second-quarter revenues for the fiscal year 2024.
SBI Aims to Recoup Rs 1,267 Crore
SBI's claim on the New Delhi properties amounts to Rs 1,267 crore, strategically pursued to recover a portion of the Rs 1,168.90 crore owed by PC Jeweller. The bank is actively navigating legal avenues, leveraging institutions such as the National Company Law Tribunal (NCLT) and the Debt Recovery Appellate Tribunal to facilitate the recovery process.
PC Jewellers' Performance Plummets
PC Jeweller's financial challenges have taken a toll on its overall performance. In a stark contrast to the same quarter the previous year, where revenues reached Rs 836 crore, the company reported a drastic plunge in Q2 FY24 revenues to a mere Rs 33 crore. This substantial downturn has also resulted in reported losses totalling Rs 152 crore.
Losses Prompt Closure of 17 Stores
In response to the crisis, PC Jeweller has made strategic decisions, including the closure of seventeen stores, comprising fourteen owned outlets and three franchises. Concurrently, the company is actively engaging in negotiations for out-of-court settlements with various banks to address its mounting debts. The ripple effect on PC Jeweller underscores the broader challenges confronting the Indian jewellery sector, grappling with issues related to credit and market trust.