Sun TV shares plunge 6% as investors fret after court cancels Dayanidhi Maran's bail

Shares of Sun TV Network plunged over 6 percent in early trade Tuesday to a low of Rs 318.70, as the company continues to face more trouble prompting investors to reduce exposure to the stock. Investors’ decision to pare exposure to Sun TV stock stems from the fact that the Madras High Court on Monday cancelled the anticipatory bail to former Union minister and DMK leader Dayanidhi Maran, giving him three days’ time to surrender. The former Union minister has been allegedly charged with entering into a criminal conspiracy and causing huge financial loss to the exchequer. [caption id=“attachment_2387238” align=“alignleft” width=“380”]  Reuters[/caption] Although, the group is owned by his brother Kalanithi Maran, the market sees any adverse court ruling could have strong ramifications on the company’s business leading to a fresh turmoil in the share price. At 10.05 am, Sun TV stock was quoted at Rs 328.80, down 3.6 percent from previous close. Earlier this year, the stock was under pressure after the company was initially disallowed by the government from participating in the ongoing FM auction process before the court ruled in its favour to take part in the bidding rounds. On June 8, the Sun TV stock had tanked 28 percent intra-day following media reports that the union home ministry has denied security clearance to the company’s 33 channels, a move that could have resulted in cancellation of their broadcasting licence. However, the stock bounced back in the following month and shot up 20 percent in July, partly aided by strong first-quarter earnings announcement. In fact, on 3 August, the stock zoomed 18 percent intra-day before trimming gains to end 11 percent higher. The company reported 19.1 percent jump in Q1FY16 net profit at Rs 197.28 crore as against Rs 165.64 crore in the same quarter a year ago. Total income rose 9.2 percent at Rs 713.24 crore from Rs 653.28 crore.