Shares of Zee Learn nosedived more than 18% in opening deals on Tuesday after YES Bank filed an insolvency case against the Zee group company. Zee Learn in an exchange filing said that YES Bank on Monday filed an application before the National Company Law Tribunal, Mumbai, to initiate a corporate insolvency resolution process (CIRP) against the company. The company has received the notice regarding the same on April 25, 2022, the Essel group firm said.

“A petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 has been filed by YES Bank Limited to initiate Corporate Insolvency Resolution Process (CIRP) of the Company, before the Hon'ble National Company Law Tribunal, Mumbai,” Zee Learn said in a filing post market hours on Monday.

Reacting to the news, Zee Learn share price opened with a loss of 8.31% to ₹12.80, against previous closing price of ₹13.96 on the BSE. In the first hour of trade so far, the stock declined as much as 18.27% to hit a low of ₹11.41. In contrast, the BSE benchmark Sensex was trading 716 points higher at 57,295 levels.

On the volume front, there was a surge in buying as 14.54 lakh shares worth ₹1.73 crore changed hands on BSE, as compared to the two-week average volume of 2.12 lakh scrips. The market capitalisation of the microcap stock dropped to ₹380.88 crore. The stock hit a 52-week high of ₹20.70 on January 7, 2022, while it touched a 52-week low of ₹9.90 on May 3, 2021.

Zee Learn in the exchange filing said that YES Bank has claimed that the total amount in default with respect to the financial facility is ₹468 crores. “However, the company is compiling information to verify the facts claimed in a said petition filed by YES Bank,” it added.

“The company shall keep the exchange updated of the further developments in the matter,” it further stated.

Established in December 2008, Zee Learn provides education across India through its various ventures. A part of the Essel group, the company runs a chain of K-12 schools, Mount Litera Zee School and a pre-school network Kidzee.

For the October-December quarter of 2021 (Q3 FY22), the company reported a net loss of ₹4.91 crore as against a loss of ₹0.20 crore during the same period last year. Sales rose marginally to ₹51.94 crore, from ₹51.19 crore during the previous quarter ended December 2020.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.