Gayatri Projects gains as subsidiary to sell stake in Sembcorp Energy

Gayatri Projects rose 2.93% to Rs 72 after the company said its arm offered to sell 5.95% stake in Sembcorp Energy to Sebcorp Utilities for Rs 406 crore.

Gayatri Energy Ventures (GEVPL), the company's wholly owned subsidiary, has proposed to sell its 5.95% stake in Sembcorp Energy India (SEIL). Sembcorp Utilities (SCU) has agreed to purchase the stake from GEVPL for a consideration of approximately Rs 406 crore. Both the parties have signed a non-binding term sheet with each other.

GEVPL will be entitled for earn-outs calculated based on a formulae that is linked to the fair market value of SEIL's equity, at the liquidity event, which will be paid by SCU to GEVPL.

The company added that the proceeds of the stake sale will be utilized for reduction of the debt, general corporate purposes and working capital. The announcement was made after market hours yesterday, 4 December 2019.

On a consolidated basis, Gayatri Projects reported a net loss of Rs 21.52 crore in Q2 September 2019 over a net loss of Rs 3.05 crore in Q2 September 2018. Net sales rose 14.1% to Rs 697.71 crore in Q2 September 2019 over Q2 September 2018.

Gayatri Projects is the flagship company of the esteemed and well diversified Gayatri Group that has interests in infrastructure, power, hospitality, real estate and industry.

On the technical front, the stock's RSI (relative strength index) stood 35.62. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading below its 50-day placed at Rs 101.88 and its 200-day moving average (DMA) placed at Rs 138.92.

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