Kirloskar Ferrous Industries reports standalone net profit of Rs 139.50 crore in the June 2021 quarter
Kirloskar Ferrous Industries (KFIL) said that it will acquire a majority stake in Indian Seamless Metal Tubes (ISMT) by subscribing to its equity shares through a preferential allotment and gain sole control over ISMT.
KFIL will subscribe to shares for an aggregate consideration of Rs 476.63 crore at a per share price of Rs 30.95 by the way of preferential allotment. These shares will represent 51.25% of the resultant share capital of ISMT.
Further, in accordance with the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the company has also commenced an open offer for acquiring up to 25.05% of the resultant voting capital of ISMT.
The board of directors of KFIL have approved to seek approval of the members of the company for increase in the permitted borrowing limits. The board has also approved raising of funds not exceeding Rs 750 crore by way of issuance of rated, listed, secured / unsecured, redeemable, non-convertible redeemable debentures on a private placement basis in one or more tranches.
ISMT is the largest integrated specialized seamless tube manufacturer in India. It is one of the most diversified manufacturers of specialized seamless tubes in the world, producing tubes in the range of 6 to 273 mm diameter. The company has alloy Steel plant in India that produces a wide range of alloy steels from 20 to 225 mm diameter. Their specialized teams provide end to end solutions to industry-specific customers.
R.V. Gumaste, managing director, KFIL, said We are excited to announce this acquisition, which is subject to necessary approvals, as we enter into the seamless pipes market. This acquisition is further widening our portfolio and diversifying the current product portfolio.
We are looking forward to leveraging our existing customer base and adding the customers that ISMT brings along. We believe this acquisition brings us an opportunity to integrate iron ore to seamless tubes at a consolidated level. Ongoing projects along with this acquisition will help us bring cost efficiencies in the value chain.
In a separate filing, Kirloskar Ferrous said that operations of sinter plant situated at Chitradurga District (Karnataka) have commenced for commercial production from 24 November 2021.
Kirloskar Ferrous Industries is a leading pig iron manufacturer in India and producer of grey iron castings.
Net profit of KFIL rose 82.93% to Rs 119.91 crore on 97.10% rise in net sales to Rs 958.38 crore in Q2 September 2021 over Q2 September 2020.
The scrip fell 1.09% to currently trade at Rs 232 on the BSE.
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