Jyothy Labs gains after reports of likely investment by Henkel

Jyothy Laboratories gained 4.04% to Rs 291.05 at 13:15 IST on BSE after reports of German consumer goods major Henkel AG's likely investment in the company.

Meanwhile, the S&P BSE Sensex was down 32.41 points or 0.12% at 26,681.52.

More than usual volumes were witnessed on the counter. On BSE, so far 1.69 lakh shares were traded in the counter as against average daily volume of 24,565 shares in the past one quarter. The stock hit a high of Rs 323.80 and a low of Rs 290 so far during the day. The stock hit a record high of Rs 342 on 11 August 2015. The stock had hit a 52-week low of Rs 239.55 on 3 June 2015. The stock had underperformed the market over the past one month till 1 June 2016, falling 8.16% compared with 4.32% gains in the Sensex. The scrip had also underperformed the market in past one quarter, gaining 6.17% as against Sensex's 12.34% gains.

The mid-cap company has equity capital of Rs 18.11 crore. Face value per share is Re 1.

Speculation about the German major Henkel AG's interest in the company has been growing in the past few months, report added. Henkel had the option to pick up to 26% stake in Jyothy five years after the latter acquired Henkel's Indian subsidiary in May 2011.

Henkel is said to be contemplating picking up the stake in Jyothy at Rs 500-600 a share, either through a fresh issue of shares or via a preferential allotment. A 25% shareholding by the German major will trigger a mandatory open-offer clause. This implies Henkel will have to offer to pick up an additional 26% report added.

Ullas Kamath, joint managing director and chief financial officer of Jyothy, reportedly quoted by media as saying that indications were positive that Henkel would put in a bid, though nothing had been finalised. The option is open for Henkel to come and talk with the company. The option for them to invest in the company will close in March 2017, he added. Kamath reportedly said business plans might have to be altered if Henkel came on board, since it might decide to introduce some of its products into the country.

Jyothy Laboratories' consolidated net profit rose 31.6% to Rs 35.61 crore on 12.4% growth in net sales to Rs 445.21 crore in Q4 March 2016 over Q4 March 2015.

Jyothy Laboratories manufactures and distributes brands across product categories as diverse as fabric care, household insecticides, utensil cleaners, fragrances, personal care, besides marketing tea and coffee brands.

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