Mercator slumps on equity dilution worries

Mercator hit a lower circuit limit of 5% to Rs 19.75 at 15:27 IST on BSE on equity dilution worries after the company's board approved raising Rs 100 crore through various options.

The company made the announcement after market hours on Monday, 30 December 2013.

Meanwhile, the BSE Sensex was up 26.92 points, or 0.13%, to 21,169.93.

On BSE, so far 2.37 lakh shares were traded in the counter, compared with an average volume of 2.06 lakh shares in the past one quarter.

The stock hit a high of Rs 21 in early trade. The stock hit a 52-week high of Rs 23 on 9 January 2013. The stock hit a 52-week low of Rs 9.10 on 6 August 2013.

The stock had outperformed the market over the past one month till 30 December 2013, rising 29.28% compared with the Sensex's 1.69% rise. The scrip had also outperformed the market in past one quarter, gaining 44.50% as against Sensex's 9.10% rise.

The small-cap company has an equity capital of Rs 24.49 crore. Face value per share is Re 1.

Mercator said its board approved raising Rs 100 crore through foreign currency convertible bonds (FCCBs)/global depository receipts (GDRs)/American depository receipts (ADRs)/depository receipts (DRs)/convertible securities, etc.

The company said it would seek shareholders' approval for the proposed fund raising plan through postal ballot process.

If one assumes that the company raises Rs 100 crore at the ruling market price of Rs 19.75, the likely equity dilution works out to 20.67%.

On a consolidated basis, Mercator's net profit dropped 44.4% to Rs 2.95 crore on 7.8% growth in net sales to Rs 886.37 crore in Q2 September 2013 over Q2 September 2012.

Mercator group has diversified business interests in coal, oil & gas, commodity transportation and dredging.

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