Bajaj Steel extends rally on sale of plastic division; stock spurts 13%

Shares of Bajaj Steel Industries hit a 52-week high of Rs 1,098.90, spurting 13 per cent on the BSE in Friday's intra-day trade, in an otherwise weak market. At 01:47 pm, the stock was up 11 per cent, as compared to 0.80 per cent decline in the S&P BSE Sensex.

In the past four trading days, the stock of the industrial products company has rallied 23 per cent, after the company's board approved the sale of plastic division (Superpack) on a slump sale basis to VSA Business Solutions Private Limited, Nagpur for Rs 4.75 crore. VSA Business is presently engaged in the business of import, export, manufacturing and dealing of plastic and plastic products.

Further, in the past six months, the stock price of Bajaj Steel has zoomed 107 per cent, as against 1 per cent rise in the S&P BSE Sensex. Currently, the stock is classified in the 'X' category on the BSE. X group consists of all those stocks which are only listed on BSE, and are settled on a trade-to-trade basis.

Bajaj Steel is presently operating under two business divisions i.e. steel division and Superpack division. The steel division is actively engaged in the manufacturing of cotton processing machines, pre-engineered buildings, engineering products, and other lndustrial products. The Superpack division is into the production of various kind of Master batches used in plastic industry.

However, considering the growth prospects and future expansion of the company, the board of directors wish to focus fully on steel division business, Bajaj Steel said as it laid down the rationale for the slump sale.

Further, the Superpack division was suffering losses from the past few years, and the losses incurred by the Superpack division had resulted in reduction in the overall profitability of the company. Thus, it also affected the financial performance of the company.

"Accordingly, the sale of Superpack division on a going concern basis is desired. The sale would result into benefits such as strengthening the balance sheet of the company, and substantial growth opportunities in line with its strategic directions," Bajaj Steel said.

Meanwhile, for October-December quarter (Q3FY23), Bajaj Steel reported six-fold jump in its consolidated net profit at Rs 21.16 crore, as against Rs 3.32 crore in the year-ago quarter. Revenue from operations jumped 71 per cent to Rs 161 crore from Rs 94 crore in Q3FY22.