Federal-Mogul Goetze spurts after SC dismisses Sebi appeal

Federal-Mogul Goetze (India) rose 18.58% to Rs 656.70 after the Supreme Court dismissed market regulator Sebi's appeal of upholding the open offer price at 608.46.

"The order disposes off the appeal, upholding the valuation of the shares of Federal-Mogul Goetze (India) (FMGIL) at Rs 608.46, as directed by the Securities Exchange Board of India (Sebi) vide its communication dated 4 July 2019, to the merchant banker. The order grants the partial relief to the acquirer that it will be required to deposit in the escrow account only such amount as is required under regulation," Federal-Mogul Goetze (India) said in a regulatory filing after market hours yesterday, 16 December 2019.

US-based Federal-Mogul was acquired by Tenneco Inc in a $5.4-billion deal in April 2018, which also triggered an open offer for the Indian subsidiary. Tenneco was acquiring 1.39 crore shares, or 25% stake, in FMGIL.

Based on independent valuation reports, the promoter of FMGIL had arrived at an open offer price of Rs 400 per share. Sebi later directed the promoter to revise upwards the open offer price to Rs 608.46. The market regulator had arrived at a price based on valuation report submitted by Haribhakti and Company, another independent valuer.

Meanwhile, the S&P BSE Sensex was up 335 points or 0.82% to 41273.72.

On the BSE, 41,738 shares were traded in the FMGIL counter so far compared with average daily volumes of 545 shares in the past two weeks. The stock hit a high of Rs 664.55 and a low of Rs 621 so far during the day.

The stock hit a 52-week high of Rs 664.55 on 17 Dec 2019. The stock hit a 52-week low of Rs 463.45 on 01 Mar 2019.

On a consolidated basis, net profit of FMGIL declined 55.38% to Rs 9.21 crore on 26.03% fall in net sales to Rs 259.02 crore in Q2 September 2019 over Q2 September 2018.

Federal-Mogul Goetze (India) makes pistons, piston rings, sintered parts and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines.

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