Bofor shares fell 4.7% to €1.99 after the company posted disappointing results.
The company said it would report full-year results on March 31.
Boford is one of the most profitable multinationals in the world.
But with earnings expected to fall as much as 5% this year, the company’s share price has been on the decline.
In 2016, the firm was on track to earn $20.4 billion ($28.6 billion) on revenues of $15.3 billion ($20.5 billion).
Boforth’s stock has declined over the past two years and is now trading around a nickel.
India’s biggest banks have been struggling to keep their cash in the bank amid the ongoing cash crunch in the country.
The RBI recently slashed the reserve requirement for banknotes by $50 to $1,000.
Bofors also announced that it would lay off 3,000 employees in India and another 3,500 in other parts of the world, as well as trim more than 100 million rupees ($1.1 billion) in debt, including about $1.5 million in India.
Banks and other financial institutions are facing a cash crunch as India’s economic growth slows to just 1.7%, its fastest rate in almost a decade.
With its large capitalization and debt, Bofort was already on shaky financial ground before the cash crunch, but the company said its losses widened because of the global economy and the fact that its debt was more than 10 times its total assets.
The losses in India have been growing at double digits every year for the past few years.
B ofor has said it plans to raise money through IPO and other financing options.