Walchandnagar Inds spurts on buzz of PE investment

Walchandnagar Industries rose 10.63% to Rs 163.45 at 14:15 IST on BSE on media report that the US private-equity giant KKR & Co will invest Rs 300 crore in the Indian company.

Meanwhile, the S&P BSE Sensex was up 109.14 points, or 0.37% to 29,967.94.

On the BSE, 3.67 lakh shares were traded in the counter so far, compared with average daily volumes of 38,503 shares in the past one quarter. The stock had hit a high of Rs 168.85 and a low of Rs 155.60 so far during the day. The stock hit a 52-week high of Rs 177 on 18 October 2016. The stock hit a 52-week low of Rs 131.10 on 25 May 2016.

The stock had underperformed the market over the past one month till 5 May 2017, falling 3.90% compared with 0.23% decline in the Sensex. The scrip had also underperformed the market in past one quarter, falling 3.68% as against Sensex's 5.73% rise.

The small-cap company has equity capital of Rs 7.61 crore. Face value per share is Rs 2.

According to the media report, the US private-equity giant KKR & Co will invest Rs 300 crore in Walchandnagar Industries in a structured-financing deal that will help the Mumbai-based conglomerate realign its businesses and repay some of its term loans. The transaction, approved by KKR's investment committee, will be signed in the coming week, report added.

The deal will help Walchandnagar Industries retire some of its bank loans, besides providing capital to drive growth. The funds would be mainly used for expansion of its defence business, as the group wants to strengthen its niche expertise, report suggested.

Meanwhile, Walchandnagar Industries clarified to the bourses during trading hours today, 8 May 2017, that its board accorded its consent for availing financial facility in the form of loan and non-convertible debentures (NCDs) upto Rs 235 crore, which shall be used partly for re-payment of existing loans and partly for long term working capital requirement of the company. The board has also approved issue of NCDs, on private placement basis upto Rs 150 crore out of the financial facility of Rs 235 crore, subject to the approval of shareholders. The company added that discussion with the lenders is in progress and not yet completed.

Walchandnagar Industries reported net loss of Rs 16.83 crore in Q3 December 2016, compared with net profit of Rs 3.95 crore in Q3 December 2015. Net sales fell 22.3% to Rs 99.77 crore in Q3 December 2016 over Q3 December 2015.

Walchandnagar Industries has a strong engineering, project management and manufacturing infrastructure to undertake projects and supply of machinery and equipments, in the fields of nuclear power, aerospace, missile, defence, oil & gas, steam generation plants, independent power projects, turnkey cement plants, mineral processing, bulk material handling and turnkey sugar plants.

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