McLeod Russel zooms 42% in 2 days after Carbon Resources buys 5% stake

On September 16, 2022, Carbon Resources (P) Ltd bought 4.95 million equity shares, representing 4.73 per cent, of total equity of MRIL

Shares of McLeod Russel India (MRIL) were locked in the 20-per cent upper circuit for a second straight day, at Rs 34.25 on the National Stock Exchange (NSE) on Monday, after Carbon Resources (P) Ltd acquired nearly 5 per cent stake in the tea company via open market on Friday.

In the past two trading days, the stock has zoomed 42 per cent from a level of Rs 24.15, hit on Thursday, September 15, 2022.

Till 10:32 AM, a combined 2.66 million equity shares had changed hands and there are pending buy orders for 7.68 million shares on the NSE and BSE. The stock was trading close to its 52-week high level of Rs 35.15 hit on September 30, 2021.

On September 16, 2022, Carbon Resources (P) Ltd bought 4.95 million equity shares, representing 4.73 per cent of the total equity of MRIL, at a weighted average price of Rs 28.19 a piece on the NSE, bulk deals data shows. CLICK HERE FOR DETAILS

At the end of June, 2022, the promoters of the company held 6.25 per cent stake in MRIL, shareholding pattern data shows. Of the 93.75 per cent public holding, individual public shareholders held 67.56 per cent stake, while bodies corporate held 14.15 per cent holding in the company, data shows.

MRIL is engaged in cultivation and manufacturing of tea. The Company is one of the largest plantation presently consisting of 33 tea estates located in Assam and West Bengal. The tea produced is sold in domestic as well as international market including United Kingdom and Europe. Its facility also includes two bulk blending unit that can blend both 'Orthodox' and Crushed, torn and curled (CTC) tea varieties.

In its FY22 annual report, MRIL said that the overall outlook for 2022-23 for quality tea is positive and the company is likely to benefit in terms of value gain on good quality teas that comprise the bulk of MRIL's produce.

"Indian tea prices have seen a considerable someupturn at the start of 2022-23 after the lows of 2021-22, following faster auction sales and early closure to the season in 2021. The prevailing inclement weather in 2022 in the main tea producing districts, especially in Assam and the increase in Orthodox production have served to fuel a shortage in availability of good quality CTC teas in the domestic Indian market," the company said.

Meanwhile, during the year the MRIL was not able to meet terms of facilities/loans availed from various Lenders. The company is in discussion with the lenders for restructuring/change in terms of the loans. Accordingly the lenders had appointed independent professionals for carrying out Techno Economic Viability Study (TEV), which was again re-vetted and confirmed during the period under review. Valuation of Tea Estate and other assets are in process and will be confirmed in due course of time.

“The committee formed by the lenders have appointed the Credit Rating Agencies for assessing the possible credit rating of the company on implementation of the proposed resolution plan and this is under process. Further the investment banker appointed by the Lenders has been in extensive discussion for finalizing the Debt Resolution Plan, now pending before the Lenders for their consideration and decision,” MRIL said in FY22 annual report.