Amtek Auto jumps on high volume after clarification

Amtek Auto surged 18% to Rs 55.10 at 14:11 IST on BSE after the company said that it is considering various means to deleverage its balance sheet and company's promoter may infuse more money into the company in future if required.

Amtek Auto made the clarification after market hours on Friday, 11 September 2015.

Meanwhile, the BSE Sensex was up 167.76 points, or 0.66%, to 25,777.97

The stock hit a high of Rs 57.90 and a low of Rs 44.75 so far during the day. The stock had hit a 52-week high of Rs 266 on 12 September 2014. The stock hit a 52-week low of Rs 25.60 on 4 September 2015.

The rally in the stock was accompanied by high volume. On BSE, so far 1.20 crore shares were traded in the counter, compared with an average volume of 18.69 lakh shares in the past one quarter.

The stock had underperformed the market over the past one month till 11 September 2015, falling 70.06% compared with 8.10% fall in the Sensex. The scrip also underperformed the market in past one quarter, sliding 66.65% as against Sensex's 2.88% decline.

The small-cap company has an equity capital of Rs 44.06 crore. Face value per share is Rs 2.

In a clarification issued after market hours on Friday, 11 September 2015, Amtek Auto announced that the company is considering various means to deleverage its balance sheet, including selling of non-core business, minority stake in overseas companies and some industrial real estate assets within the business. The company further said that the promoter may infuse more money into the company in future if required. The company issued these clarifications after the stock jumped a whopping 53.62% to settle at Rs 46.70 in a single trading session on Friday, 11 September 2015, after the company's managing director John Flintham said in interview to news channel that the company may look to sell significant minority stake in overseas businesses to pare debt.

Meanwhile, Amtek Auto on 10 September 2015 allotted 44.37 lakh equity shares at Rs 169 per share to two promoter group companies by way of preferential allotment. The preferential share issue is in lieu of conversion of the outstanding amount of unsecured loans given by these two promoter group companies to Amtek Auto. Hence, the company will not get fresh funds from this preferential allotment.

It may be recalled that the shares of Amtek Auto witnessed a massive slide in mid-August 2015 after the National Stock Exchange (NSE) announced that the bourse has decided to exclude the Amtek Auto stock from its equity derivatives segment based on the stock selection/exclusion criteria prescribed by Sebi.

Amtek Auto reported net loss of Rs 157.60 crore in Q3 June 2015 as against net profit of Rs 86.08 crore in Q3 June 2014. Net sales declined 12.7% to Rs 854.22 crore in Q3 June 2015 over Q3 June 2014.

Amtek Auto is one of the largest integrated automotive component manufacturers in India with a strong global presence. Amtek Auto has a presence in forging, grey and ductile iron casting, gravity and high-pressure aluminum die casting and machining and sub-assembly. The company also manufactures components for non-auto sectors such as the railways, specialty vehicles, aerospace, agricultural and heavy earth moving equipment. The company has manufacturing facilities in India, Europe and North America.

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