Indal Net Zooms To Rs 48.86 Cr

The offer prices for taking up a 20 per cent equity in Indian Aluminium Co Ltd (Indal) by the original promoters Alcan and the corporate raider Sterlite Industries are likely to shoot up following a sterling performance by the aluminium major in the second half of 1997-98.

After a 41 per cent dip in net profit at Rs 22.54 crore in the first half of the year compared with the corresponding period in the previous year, the company has sprung back to more than double its net to Rs 48.86 crore in the second half.

Considering Indal's improved performance in 1997-98 and its higher earning per share (EPS) of Rs 10, the intrinsic value of the company's share price has shot up to Rs 120, said S M Datta, chairman of the company, at a press conference here yesterday.

 

In view of this, it now becomes imperative for the two bidders to revise their offer prices above Rs 120 to make their offers attractive.

The offer price of Sterlite Industries now stands at Rs 115 per share, while Alcan's offer price is Rs 105 per share.

Suresh Thadani, chief financial officer, Alcan, the principal shareholder of Indal, while talking to reporters also dropped hints on the revision of offer prices saying.

"Our position on the issue will be clear in two to three days' time, he said.

Talking about Indal's financial performance, Tapan Mitra, vice-chairman and managing director of Indal, said, Sterlite's unsolicited and unfriendly bid followed by its propaganda blitz will get a beating by our substantial improvement in the second half.

Indals sales and operating revenue stood at Rs 1,162.50 crore against Rs 1,155.58 crore in 1996-97 with a net profit of Rs 71.4 crore, up 21 per cent over last year from Rs 59.19 crore.

Its exports were Rs 226.5 crore in 1997-98. Interest burden came down to Rs 39.94 crore during the period under review from Rs 48 crore in the previous year. The reduction is mainly due to the repayment of some high cost loans.

Mitra attributed the sharp rise in the net profit in the second half of the year to the savings on interests and a substantial reduction in the operating cost of the company.

Surprisingly, in what could have a serious insider trading implications, the company results bear striking similarity with the figures leaked out to a section of the media two days before the board meeting of the company.