Shares of Eros International Media hit a lower circuit of 10 percent on Tuesday, falling over 44 percent in the last one week following alleged potential wrongdoing at parent Eros International Plc and rating downgrades.

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Hitting the lower circuit for the 4 straight sessions today, Eros shares were down 10 percent at Rs 39.60 per share on BSE. In comparison, the BSE Sensex was trading 0.1 percent (33 points) higher at 39,818.

Hindenburg Research alleged wrongdoing by its parent company in a report on June 10. Eros International Plc rubbished the Hindenburg report and announced a $20 million share buyback programme.

The company in a filing said that "baseless allegations have been made against the company in the past and subsequent frivolous lawsuits have been dismissed with prejudice by the US courts. Similar baseless allegations continue to be made by known short sellers without justification. We will continue to defend our interests rigorously at all times.”

Rating agencies categorising Eros International Media's debt at default levels is another negative development affecting the stock. In the beginning of June, rating agency CARE revised its rating on company's long-term bank facilities (term loan Rs 300 crore and cash credit of Rs 263 crore) down to 'D' from 'BBB-' each, while keeping the outlook stable. The agency also downgraded the rating on Eros' short-term bank facilities worth Rs 187 crore to 'D' from 'A3' earlier.

However, the company said that it has taken steps to rectify delays in loan payments.

"Additionally, I am pleased to inform shareholders that we now have a strong financial and operating position and our management team are making it a priority to work with CARE Ratings, the regulatory agency, to have our credit rating revised upwards in due course," it said in a regulatory filing.

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