Minda Corporation has acquired 15.7 percent stake in Pricol, an automotive components and precision engineered products manufacturer, for Rs 400 crore, said the company on February 17.
"This is merely a financial investment without providing the company any special rights in Pricol other than the rights as a shareholder of Pricol Limited," Minda Corp said in an exchange filing.
The acquisition was done via open market at an average price of Rs 208.98 per share aggregating to Rs 400 crore.
At 9:20am, Pricol hit a 52-week high of Rs 219.25 apiece on the NSE. Soon after, it slipped into the red and was quoting at Rs 200.30, lower by 3.8 percent.
The share price of Minda Corporation also extended losses after the deal was announced. At 12:35 pm, the stock was trading lower by 2 percent at Rs 209.75 apiece.
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Sources had told CNBC-TV18 on February 16 that Minda Corp was looking to acquire over 15 percent stake in Pricol through a reverse book building process.
Speaking to the channel, Pricol Managing Director Vikram Mohan, however, said that he was not aware of this deal till late last night. "We do not see any synergies with Minda Corp. We are competitors, will not work with Minda Corp," he added.
As of December 2022 end, the promoter and promoter group held 36.5 percent stake in the company, while public shareholding stood at 63.47 percent. "I have spoken to key institutional investors, they are firmly backing us. I have assurance of no sale from institutions which own 16 percent," Mohan said.
In Q3 FY23, Tamil Nadu-based Pricol reported consolidated profit at Rs 26.76 crore, higher by 54.27 percent in the year-ago period. Revenue from operations was up 16.3 percent to Rs 474.8 crore during the period.
"We have turned around the company in the last few years by making it net debt free and have set it on a firm growth path. The promoters have absolutely no intent of undertaking any secondary stake sale nor does the company have any intent to raising equity capital," Pricol said in an exchange filing.
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