Radico Khaitan hits the roof on buzz of stake sale

Radico Khaitan hit an upper circuit limit of 5% at Rs 125.70 at 10:02 IST on BSE on reports that the company plans to sell a minority stake to Japanese liquor company Suntory Holdings.

Meanwhile, the BSE Sensex was down 164.44 points, or 0.87%, to 18,721.69.

On BSE, 6.19 lakh shares were traded in the counter compared with average volume of 42,203 shares in the past one quarter.

The stock hit a high of Rs 125.70 and a low of Rs 122 so far during the day. The stock hit a 52-week high of Rs 155.95 on 31 December 2012. The stock hit a 52-week low of Rs 88.65 on 24 July 2013.

The stock had outperformed the market over the past one month till 2 September 2013, rising 28.35% compared with the Sensex's 1.45% decline. The scrip had also outperformed the market in past one quarter, falling 3.62% as against Sensex's 4.42% fall.

The small-cap company has an equity capital of Rs 26.59 crore. Face value per share is Rs 2.

According to the media report, Radico Khaitan is examining the option of offering 26% in the company to Suntory. The Japanese spirits major is expected to pay close to Rs 870 crore for the stake, valuing Radico Khaitan at Rs 3500 crore, or close to 20 times its fiscal year ended March 2013 (FY13) operating profit, report added.

The proposed deal is likely to include a provision to buy another 23% stake at a later date. Khaitans, the promoters of the company, will retain stake in the distillery business and provide outsourcing support to the multinational partner, report added.

As on 30 June 2013, promoters held 40.50% stake in Radico Khaitan.

Radico Khaitan's net profit rose 6.58% to Rs 22.51 crore on 19.80% rise in net sales to Rs 348.44 crore in Q1 June 2013 over Q1 June 2012.

Radico Khaitan is one of India's oldest liquor manufacturers.

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