TIL turns volatile after board approves sale of Caterpillar dealership biz

The stock hit an intra-day high of Rs 364, recovering 21% from its early morning low of Rs 300 on the BSE.

Shares of TIL has turned volatile gaining more than 20% in intra-day trade after the company on Thursday said it plans to sell its profit-making Caterpillar dealership business — spread over India, Nepal and Singapore — to Goodearth Minetech Private Limited (GPML) of Delhi for a net consideration of Rs 350 crore.

The stock had fallen 15% to Rs 300 in early morning trade after opening at Rs 313 on the BSE. It touched a high of Rs 364, recovering 21% from day’s low level on the back of heavy volumes.

At 09:53 am, the stock was up 2% at Rs 357 on back of over 10-fold jump in trading volumes as compared to 0.29% decline in S&P BSE Sensex.

A combined 620,852 shares changed hands against an average sub 50,000 shares that were traded daily in past two weeks on the BSE and NSE.

“The company's board on 21st April, 2016 has resolved to transfer the Caterpillar dealership business of the company as a going concern for a net consideration of not less than Rs 350 crore”, TIL Ltd said in a regulatory filing.

The company said the transfer of ownership of the Caterpillar business will be achieved by selling shares of Tractors India Pvt Ltd, Tractors Nepal Pvt Ltd and by sale of specified assets and liabilities pertaining to Caterpillar business, it added.

TIL Overseas Pte Ltd shall continue to be a subsidiary of the company, it added. 

"Goodearth Minetech Pvt Ltd, New Delhi has evinced interest to acquire the Caterpillar business as a going concern on the consideration mentioned above," it said.

The company's business is organized into three major segments i.e material handling, construction equipment and power systems etc. TIL is the exclusive dealer for Caterpillar products in North and East India, Bhutan and Nepal.