Shares of Uflex India tumbled 15 per cent to Rs 366 on the BSE in Monday's intra-day trade, extending its past four-day decline, amid reports of Income Tax raid at the company's various office locations. In the past one week, the stock has tanked 25 per cent, as compared to less than 1 per cent decline in the S&P BSE Sensex. It was quoting at its lowest level since May 2021.
The Exchanges sought clarification from Uflex on February 21, 2023, with reference to news reports stating Income Tax department had raided Uflex Ltd's offices across various cities. The company is yet to submit a response.
Meanwhile, the raids conducted by the Income Tax Department at more than 70 locations of Uflex company continued for the fourth day on Friday, nes agency IANS reported.
"Bogus transactions worth Rs 500 crore have been detected. Two of the company's premises located in Noida (Uttar Pradesh), and Delhi's Shahdara have been sealed. Raids have been completed at 15 places outside Noida and search has been extended at 10 locations in NCR. Search is underway at 66 locations, including NCR," the report said.
Ten shell companies and documents revealing suspicious transactions have also been found. The officials believe that the figure of bogus transactions can go up to Rs 500 crore, the report added.
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Uflex is India's largest multinational flexible packaging and solutions company. Uflex has created a presence across all verticals of the packaging value chain - Flexible Packaging, Packaging Films, Aseptic Liquid Packaging, Holography, Printing Cylinders, Engineering, and Chemicals.
In the October-December quarter (Q3FY23), the company reported Rs 85 crore loss after tax which was largely due to a loss of Rs 84 crore on account of currency devaluation by Egypt. In Q3FY22, Uflex recorded a profit after tax of Rs 314 crore. During the third quarter, notional foreign exchange losses due to currency devaluation/fluctuations aggregated to Rs 236 crore, which is unprecedented, the company said.
This quarter witnessed currency devaluation for the second time in the calendar year 2022 by Egypt and an increase in interest rates emanating from aggressive US Fed policies, leading to cross-currency fluctuations that impacted the financials significantly. This magnitude of losses from currency devaluation/fluctuations, although notional, is unprecedented and has not been seen in the last many years, Rajesh Bhatia, Group CFO, Uflex said.
