Kirloskar Ferrous Industries Ltd (BSE : 500245) ('the Company'), one of India's largest castings and pig iron manufacturers, has agreed to acquire a majority stake in Indian Seamless Metal Tubes (ISMT) Limited ('Target Company') by subscribing to equity shares of the Tsarget Company through preferential allotment and sole control over ISMT Limited, subject to the approvals of the members of the Company and the Target Company and necessary statutory and regulatory approvals.
KFIL will subscribe to shares for an aggregate consideration of Rs. 476.63 Crores at a per share price of Rs. 30.95 by the way of preferential allotment. These shares will represent 51.25 percent of the resultant share capital of the Target Company. 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 percent of the resultant voting capital of the Target Company.
The board of directors of the company have also approved to seek approval of the Members of the company for increase in the permitted borrowing limits.
About ISMT - 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.
Commenting on the acquisition, 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. We believe these synergies will put us on an accelerated growth path in coming years."
Shares of Kirloskar Ferrous Industries Ltd was last trading in BSE at Rs. 234.55 as compared to the previous close of Rs. 227.60. The total number of shares traded during the day was 31186 in over 987 trades.
The stock hit an intraday high of Rs. 235.60 and intraday low of 228.35. The net turnover during the day was Rs. 7229735.00.