Amtek Auto spurts as JP Morgan manages to sell Amtek debt papers

Amtek Auto rose 10.66% to Rs 51.40 at 15:30 IST on BSE on reports JP Morgan Asset Management Company has sold the debt papers of the auto component maker to a private equity firm at a 15% loss.

Meanwhile, the BSE Sensex was down 219.78 points, or 0.86%, to 25,310.33.

On BSE, so far 91,000 shares were traded in the counter, compared with an average volume of 29.02 lakh shares in the past one quarter.

The stock hit a high of Rs 53.40 and a low of Rs 46.30 so far during the day. The stock hit a 52-week high of Rs 213 on 10 December 2014. The stock hit a 52-week low of Rs 25.60 on 4 September 2015.

The stock had outperformed the market over the past one month till 7 December 2015, rising 12.06% compared with 2.80% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 59.62% as against Sensex's 2.56% rise.

The small-cap company has an equity capital of Rs 44.95 crore. Face value per share is Rs 2.

According to reports, JP Morgan Asset Management Company (AMC) has managed to sell the debt papers of Amtek Auto to a private equity firm at a 15% loss. Following the move, JPMorgan allowed investors to make redemptions. The fund house had de-merged the Amtek Auto exposure into a 'segregated asset' and imposed a ban on redemption.

JP Morgan AMC through two of its schemes had bought bonds worth Rs 200 crore issued by Amtek Auto.

On 21 August 2015, Amtek Auto informed stock exchanges that it was facing some temporary cash flow mismatch. Following this, a rating agency suspended coverage on Amtek Auto's debt paper. In September 2015, Amtek Auto had defaulted on repayment due to liquidity issues. The move forced JP Morgan to initially impose a cap on redemptions of its debt funds that invested in Amtek Auto bonds, later after unit holders' approval, segregated the toxic assets as separate units.

However, now those unit holders holding units of segregated assets in schemes JP Morgan India Treasury Fund and JP Morgan India Short Term Income Fund can place redemption requests.

Amtek Auto reported net loss of Rs 158.62 crore in Q4 September 2015 compared with net profit of Rs 74.37 crore in Q4 September 2014. Net sales declined 17% to Rs 810.30 crore in Q4 September 2015 over Q4 September 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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