Here's why PTC India Financial shares tanked over 19% today

Shares of PTC India Financial Services Limited tanked over 19 per cent to hit an intraday low of 20.65 on BSE after all three independent directors on the company’s board resigned over corporate governance issues.
 
"We are in receipt of resignations from three independent directors mentioning some reasons. The matter will be addressed at the board level and a subsequent update will be communicated to all the stakeholders appropriately," the company said.
 
The stock ended 18.32 per cent lower at Rs 20.95 against the previous close of Rs 25.65. With a market capitalisation of Rs 1,345 crore, the shares stand higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
 
On Wednesday, three independent directors of PTC India Financial Services (PFS) -- Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew T-- resigned from the board with immediate effect.
 
In the resignation letters, they have alleged that certain actions of the Chairman of the Board and Managing Director of the company are "ultra-vires" and "in violation" of the provisions of the companies Act, 2013.
 
They also referred to the issues regarding Rs 125 crore-bridge loan given to NSL Nagapatnam Power and Infratech Pvt Ltd, besides alleging that "no action" has been taken on certain corporate governance issues.
 
Recently, PFS announced that it will receive its share of around Rs 125 Crore as part of the total resolution amount from one of its stressed loan accounts in the thermal segment namely the 2x600 MW coal power plant located at Cuddalore District in Tamil Nadu.
 
The instant project has been implemented by IL&FS Tamil Nadu Power Company Ltd. (ITPCL). PFS had sanctioned a total loan of Rs 200 crores under consortium arrangement to ITPCL for implementing the instant project.
 
PFS is a non-banking finance company promoted by PTC India Limited. PFS has been granted the status of an Infrastructure Finance Company (“IFC”) by the Reserve Bank of India.
 
PTC India Financial reported a 65 per cent jump in its net profit at Rs 52.4 crore for the quarter ended September 2021. Profit in the year-ago period stood at Rs 31.8 crore. The net sales of the company fell to Rs 242 crore from Rs 295 crore in the year-ago period.
 
According to MarketsMojo, the stock is trading at a premium compared to its average historical valuations and it has a very expensive valuation. The company has a weak long-term fundamental strength with an average Return on Equity (ROE) of 4.89 per cent.
 
(With inputs from PTI)