TN rains submerge all economic & biz activity

Shares of companies with exposure to Chennai came under selling pressure, falling as much as 6.4 per cent on Wednesday, as incessant heavy rains there and other parts of Tamil Nadu hit their operations.

A large number of companies across sectors such as Infosys, TVS Motor, Madras Fertilizers and Natco saw their stocks decline by as much as 6 per cent. Shares of TVS Motor Company plunged 4.87 per cent to Rs 289.20 on BSE.

“Incessant rains for the past three weeks in Chennai have had an adverse effect on company’s production during this period. The company suffered sales loss of approximately 15,000 units due to inclement weather,” TVS Motor said on Tuesday.

The stock of Natco Pharma fell by 1.41 per cent to Rs 516.85. Natco Pharma said its active pharmaceuticals ingredient (API) plant at Chennai has suspended operations due to flooding caused by rains. 

Heavy downpour has hit operations of IT companies in Chennai one of the leading IT destination in the country. Most of the offices in the city, including that of IT companies, remained closed today due to heavy rains with leading Indian firm Infosys deciding to remain closed tomorrow as well due to flooding at its premise.

“In light of the rains and flooding in Chennai, Infosys campuses in the city were closed on December 2 and we have also declared a holiday on December 3. Our teams in Chennai have been working with local authorities to get employees stranded across the city to return home safely,” Infosys spokesperson said. Infosys stock was down 1.53 per cent to Rs 1,060.20.

Others such as Madras Fertilizers tumbled 6.35 per cent to Rs 16.95, India Cements declined by 2.43 per cent to Rs 88.45 and Chennai Petroleum Corporation were down 0.93 per cent to Rs 201.45. “Shares of companies based in Chennai took a sharp hit as heavy flooding in the region paralysed operations across many sectors. Chennai is a major auto manufacturing and IT outsourcing hub for companies,” an expert said.

Chennai and several coastal areas of Tamil Nadu were on Wednesday marooned in flood waters following incessant heavy rains that pounded the city and the neighbouring districts cutting the state capital from rail and road links even as the airport was shutdown for the day.

Moreover, auto majors Hyundai, Ford and Renault have temporarily suspended operations at their plants in Chennai due to floods.

“We have suspended three shifts, one last night and two shifts for today, at our plant due to the rain,” a Hyundai Motor India Ltd official said. The company will take a call on resuming operations depending on the rains that have flooded the city, the official added. Hyundai’s Chennai plant has a capacity to produce around 6.8 lakh vehicles annually. Ford India too has suspended operations at its Chennai plant.

“Continued heavy rains in Chennai have resulted in significant flooding in the area with many roads impassable. For the safety of our employees, we have halted production at our Chennai assembly and engine plants on Wednesday, December 2,” a company spokesperson said in a statement. 

The company is carefully monitoring the situation and will return to normal operations as soon as 

the conditions improve.

“We will assess the impact once operations return to normal. Our immediate concern is for the continued safety of our employees and the members of the Chennai community,” the spokesperson added.

Ford’s Chennai plant has a capacity to produce 3.4 lakh engines and 2 lakh cars annually. Likewise, Renault India said operations at the plant in Chennai have been suspended for a day.