Venky's (India) gains on board's nod to acquire poultry business from holding firm

Venky's (India) rose 1.75% to Rs 471.05 at 14:54 IST on BSE after the company said its board has approved a proposal to acquire poultry and packaging business operations of Venkateshwara Hatcheries, its holding company, on going concern basis.

The announcement was made during trading hours today, 12 March 2014.

Meanwhile, the S&P BSE Sensex was up 4.89 points or 0.02% at 21,831.31.

On BSE, so far 5,733 shares were traded in the counter as against average daily volume of 1,918 shares in the past one quarter.

The stock hit a high of Rs 495 and a low of Rs 462.10 so far during the day. The stock had hit a 52-week high of Rs 594.95 on 2 April 2013. The stock had hit a 52-week low of Rs 390 on 18 September 2013.

The stock had underperformed the market over the past one month till 11 March 2014, sliding 6.12% compared with the Sensex's 7.18% rise. The scrip had also underperformed the market in past one quarter, advancing 0.85% as against Sensex's 3.09% rise.

The small-cap company has equity capital of Rs 9.39 crore. Face value per share is Rs 10.

Venky's (India)'s board of directors at its meeting held today, 12 March 2014, has approved a proposal to acquire poultry and packaging business operations, on going concern basis, of Venkateshwara Hatcheries (VHPL), its holding company, situated in Northern India in Haryana, Punjab, Himachal Pradesh and Uttarakhand.

The acquisition is a part of inorganic expansion plan of the company which will consolidate Poultry operations in Northern India thereby increasing operational efficiency due to synergy and strengthen the geographical presence for the company in Northern India, Venky's (India) said. This will increase long-term value for all stakeholders, it added. The acquisition is estimated to cost around Rs 75 crore, the company said.

Venky's (India) said that the proposed acquisition will become effective once definitive agreements are signed in this regard, subject to all requisite regulatory and statutory approvals. Barring unforeseen circumstances the company proposes to complete acquisition by end of financial year 2013-14, it added.

Venky's (India) reported a net profit of Rs 10.43 crore in Q3 December 2013 as against net loss of Rs 14.32 crore in Q3 December 2012. Net sales rose 28.6% to Rs 438.26 crore in Q3 December 2013 over Q3 December 2012.

Venky's (India) is an integrated poultry firm.

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