Kirloskar Ferrous Industries Ltd has entered into a Share Subscription Agreement dated 25 November 2021 with ISMT Ltd and certain members of the Promoters Group ('SSA'). Pursuant to the SSA, the Company will subscribe to 15,40,00,000 equity shares of Rs. 5 each by way of preferential allotment. These shares will represent 51.25 percent of the resultant share capital of the Target Company.
Further, the Company has also commenced an open offer for acquiring upto 25.05 percent of the resultant voting capital of the Target Company.
The Company will subscribe to shares for an aggregate consideration of Rs. 476.63 Crores at a per share price of Rs. 30.95. Further, an unsecured loan of Rs. 194 Crores will be extended to the Target Company by the Company.
The proposed transaction would enable the Company to enter the business segment of steel manufacturing and seamless tubes.
ISMT Limited (earlier known as The Indian Seamless Metal Tubes Limited) was incorporated as a public limited company in the year 1977 and commenced production of seamless tubes in the year 1980.
The steel production facility of the Target Company is located at Jejuri in Maharashtra, and seamless tube and pipes manufacturing units are located at Ahmednagar and Baramati in Maharashtra. Further, the Target Company has a captive power plant (presently not in operation) located at Chandrapur in Maharashtra.
ISMT Limited is engaged in the business of manufacturing steel, billets, alloy and carbon casts. It has a total of 10 direct and indirect subsidiaries both in India and abroad. The Target Company is listed on the BSE (532479) and the NSE (ISMTLTD).
The Authorised Share Capital of the Target Company is INR 158,50,00,000 and the paid-up share capital of the Target Company is INR 73,25,06,915.
The turnover of the Target Company for the financial year 2020-2021 was Rs. 1,234.67 Crores.
Subject to the timely receipt of the approval of regulatory approvals, the transaction is expected to be completed in the last quarter of the financial year 2021-2022.
Shares of ISMT Limited was last trading in BSE at Rs. 34.00 as compared to the previous close of Rs. 32.40. The total number of shares traded during the day was 27229 in over 58 trades.
The stock hit an intraday high of Rs. 34.00 and intraday low of 34.00. The net turnover during the day was Rs. 925786.00.
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.