HSIL surges on divestment of BPD Undertaking to Brilloca for Rs 630 cr

HSIL soared 13.18% to Rs 264.10 after the board approved the transfer of its manufacturing business on a contract basis, of BPD (Building Products Division) Undertaking to Brilloca on a slump sale basis for a consideration of Rs 630 crore.

The BPD (Building Products Division) Undertaking of HSIL broadly comprises of two sanitaryware manufacturing plants and one manufacturing plant each for faucets and plastic pipes (PVC and CPVC) and fittings.

The revenue from operations of BPD Undertaking stood at Rs 592.70 crore, representing around 31.9% of its overall revenue from operations of Rs 1,852.59 crore of HSIL for FY 2020-21. The net worth of BPD Undertaking, as of 31 March 2021, was at Rs 475 crore, representing around 38.5% of the overall net worth Rs 1,233.56 crore of HSIL.

With the proposed transaction, the Building Products division's entire operating facilities of HSIL will be transferred to Brilloca. As per the company's press relaese, the cash proceeds of Rs 630 crore will be utilized towards the pre-payment of existing bank borrowings to further strengthen the HSIL's balance sheet and create capital to further expand its packaging business.

In future, HSIL plans to completely focus on the expansion of its packaging business and capitalize on both organic and inorganic opportunities. The transaction is expected to close by 31 March 2022 or such date as mutually agreed between HSIL and Brilloca.

HSIL's net profit fell 16.6% to Rs 30.41 crore on a 28.1% surge in net sales to Rs 546.21 crore in Q2 FY22 over Q2 FY21.

HSIL is a packaging products company that manufactures and markets various packaging products, including glass containers and polyethylene terephthalate (PET) bottles, products & security caps, and closures.

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