Acquisition does not stop Apar Industries' slide

Acquisition does not stop Apar Industries' slide

Apar Industries slipped 1.01% to Rs 259.40 at 14:34 IST on BSE, after the company said its board has approved a proposal to acquire a majority stake in in Uniflex Cables.

The company made this announcement during trading hours today, 11 February 2008.

Meanwhile, BSE Sensex was down 539.27 points or 3.09% to 16,925.52 as poor debut of Reliance Power, which had come out with India's biggest IPO, last month, hit market sentiment. Market men had initially expected the price to double on debut, but stock market turmoil had lowered investor risk appetite and expectations were toned down subsequently with market men expecting a premium of about Rs 75-to Rs 150 above the IPO price on debut. The Reliance Power IPO was subscribed 73 times.

On BSE, 393 shares were traded in the counter. The scrip had an average daily volume of 13,263 shares in the past one quarter.

The stock hit a high of Rs 263 and a low of Rs 240 so far during the day. The stock had a 52-week high of Rs 449.80 on 3 January 2008 and a 52-week low of Rs 121.10 on 20 March 2007.

The small-cap scrip had underperformed the market over the past one month till 8 February 2008, declining 24.20% compared to the Sensex’s decline of 15.15%. It had outperformed the market in the past one quarter, gaining 3.47% compared to Sensex’s decline of 7.63%.

The company’s current equity is Rs 32.33 crore. Face value per share is Rs 10. The current price of Rs 259.40 discounts its Q3 December 2007 annualized EPS of Rs 16.96, by a PE multiple of 15.29.

Apar Industries has signed an agreement to buy 40.81 lakh shares of Rs 10 each at Rs 48.50 per share totalling Rs 19.79 crore, and 29.26 lakh fully convertible debentures (FCDs) of Rs 25 each at Rs 48.50 per FCD for Rs 14.19 crore of Uniflex from ADM Maculus Fund II LP.

Apar is also buying 29.5 lakh warrants of Rs 25 each on which Rs 2.50 has been paid at Rs 26 per warrant for Rs 7.67 crore from ADM Maculus Fund II LP, the company said in a statement. In November 2007, Apar Industries's conductor division bagged an export order worth about Rs 122.5 crore from Ethiopian Electric Power Corporation, a sole power utility in Ethiopia.

Apar Industries’ net profit rose 14.2% to Rs 13.71 crore on 31.6% growth in net sales to Rs 472.90 crore in Q3 December 2007 over Q3 December 2006.

Apar Industries offers products and services in power transmission conductors, petroleum specialties and synthetic rubber