Kirloskar Oil Engines gained 1.29% to Rs 392 at 9:45 IST on BSE after the company's board approved the proposal for acquisition of 100% equity shares of La-Gajjar Machineries.
The announcement was made after market hours yesterday, 20 June 2017.Meanwhile, the S&P BSE Sensex was down 87.99 points, or 0.28% to 31,209.54. The S&P BSE Mid-Cap index was down 16.53 points, or 0.11% to 14,828.76.
On the BSE, 641 shares were traded in the counter so far, compared with average daily volumes of 6,112 shares in the past one quarter. The stock had hit a high of Rs 399 and a low of Rs 391.05 so far during the day. The stock had hit a record high of Rs 416 on 8 May 2017. The stock had hit a 52-week low of Rs 250 on 17 June 2016.
The stock had underperformed the market over the past one month till 20 June 2017, falling 1.16% compared with 2.73% rise in the Sensex. The scrip had also underperformed the market in past one quarter, declining 0.6% as against Sensex's 6.03% gains. The scrip had, however, outperformed the market in past one year, gaining 48.5% as against Sensex's 16.49% gains.
The mid-cap company has equity capital of Rs 28.92 crore. Face value per share is Rs 2.
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Kirloskar Oil Engines said that the board of directors of company in a meeting held on 19 June 2017, had approved the proposal for acquisition of 100% equity shares of La-Gajjar Machineries Private Limited (LGM). This is subject to signing of definitive agreements.
76% stake will be acquired with immediate effect and the balance 24% would be acquired on or before the completion of 5 years from the closing date. The closing is expected to be completed within 3 months subject to fulfilling of conditions as may be specified in the definitive agreements.
The final acquisition price will be determined based on 7.89 times the EBITDA (earnings before interest, taxes, depreciation and amortization) multiple of the company for FY 2018. The acquisition price would also be subject to certain adjustments for changes in net working capital and net debt on closing. No governmental or regulatory approvals are required for the acquisition.
LGM provides the company strong and established footprint into the electric pump market and further consolidates on company's strong position in the pump segment. LGM was incorporated in 1981 and is into manufacturing of oil filled motors in India. LGM clocked revenue of Rs 400 crore in FY 2017.
Kirloskar Oil Engines' net profit fell 24.3% to Rs 44.22 crore on 2.8% rise in net sales to Rs 700.33 crore in Q4 March 2017 over Q4 March 2016.
Kirloskar Oil Engines is one of the leading and largest manufacturers of diesel engines.
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