In an interview to CNBC-TV18 SN Modani, MD, Sangam India said that its promoter group company has bought 16.35 lakh shares at Rs 38 per share increasing their stake upto 42.8 percent in the company. Shares of the company inched around 8 percent to close at Rs 40.95 on Thrusday. He expects further promoter buying as the stock is under-valued and the company will use this opportunity to consolidate its stake through gradual buying.
Below is the verbatim transcript of SN Modani’s interview on CNBC-TV18
Q: There was a big block deal that took place in your account, were the promoters likely buyers in this?
A: Yes, promoter group company has bought 16.35 lakh shares at Rs 38 per share.
Q: With this deal, where would promoter’s stake stand at?
A: With this promoter holding will go to 42.8 percent after today’s transaction.
Q: Can we see any further promoter buying in this regard given that we have already seen 4 percent, I think the limit is around 5 percent but going ahead in the next financial year is there some kind of plans it is likely to come up with?
A: Yes, because stock is under-valued and we are using this opportunity to consolidate our stake in the company through creeping. So definitely in the next financial year we are willing to increase our limits through creeping.
Q: But you all will only go upto 5 percent which is allowed per year via creeping acquisition, would you not consider a buyback to make use of this opportunity?
A: We will go only through creeping and for that 5 percent limit is there.
Q: What will be the target promoter holding for you all?
A: Target will be more than 51 percent in the near future.
Q: With regards to your polyester staple fiber which is the key raw material, what is the outlook on that because it is related to crude prices as well as currency movement?
A: When the polyester prices increase, we also increase our yarn prices so that is quite stable, it is not moving in the band of more than 10 percent, it is varying between 4-5 percent on quarter-to-quarter basis so that we can pass on to the customer.
Since we are spinner and processor, we can absorb and we are at Bhilwara which is a major center for dyed yarn and so, we are closely monitoring that and the company is able to pass on the prices of raw material in the finished goods, there is no risk.
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