DCM soars 20% as board approves business restructuring plan

The stock locked in upper circuit of 20% at Rs 117, also its 52-week high on BSE.

DCM was locked in 20% upper circuit at Rs 117, also its 52-week high on BSE, after the board approved the restructuring of its business including demerger of real estate business.

The trading volumes on the counter jumped five-fold with a combined 915,215 shares changed hands. There were pending buy orders for 175,197 shares on the BSE and NSE at 11:21 am.

The board at its meeting held on October 15, 2016 approved the de-merger of real estate undertaking of DCM and merging it into DCM Realty and Infrastructure.

The board also approved amalgamation of TIARA Investment Holdings into Purearth Infrastructure. The amalgamation of Purearth Infrastructure into DCM Realty and Infrastructure will after the above mentioned moves are carried out.

The board approved the demerger of cotton textiles business of DCM to DCM Nouvelle, such that post demerger shares of DCM Nouvelle will be held by shareholders of DCM in the same proportion as their shareholding in DCM.

The shareholders of DCM will get one equity share of Rs 10 each of the DCM Realty and Infrastructure and DCM Nouvelle for every one share held by them. DCM Realty and Infrastructure and DCM Nouvelle will list on the stock exchanges.

DCM said that the management believes that the nature of offerings and the risk and return profile of the cotton textile business is different from that of other businesses of DCM, which include manufacturing and supply of grey iron castings, cylinder heads, cylinder blocks and housing, etc. for automotive markets, real estate development and IT infrastructure services along with related activities.