Mukand hits upper circuit for 14th straight day, rallies 87% in September

The stock hit a 52-week high of Rs 51.50, rallied 87% thus far in September, against 0.45% gain in the S&P BSE Sensex.

Shares of Mukand were locked in upper circuit for the 14th straight trading day, up 5 per cent at its 52-week high of Rs 51.50 on the BSE on Monday. The company is engaged in iron & steel/intermediates products.

Thus far in the month of September, the stock has rallied 87 per cent after its board, on August 31, approved the proposal for divestment of upto 51 per cent equity stake/investment held in Mukand Sumi Special Steel (MSSL) to promoter group entities for total consideration of Rs 1,212.95 crore. In comparison, the S&P BSE Sensex gained 0.45 per cent during the period.

Mukand said the consideration shall not be less than Rs 571.91 per equity share of MSSL, in one or more tranches, over a period of 12 months. The divestment is subject to the approval of shareholders and other approvals as may be required. Post receipt of requisite approvals, the Company shall enter into a definitive agreement to sell sale shares to the proposed buyer, it adds.

Meanwhile, Mukand reported a loss before tax of Rs 148 crore for the quarter ended June 2020 (Q1FY21), against loss of Rs 43 crore in the year-ago quarter.

The company said stress on liquidity position has been partially mitigated by the relief given by the Government, Reserve Bank of India (RBI), Electricity Distribution Companies, etc. Management expects that considering the nature of its business operations, existing customer and supplier relationships, impact on its business operations, if any, arising from COVID -19 pandemic may not be significant in the long run and would be able to recover carrying amount of all its assets as appearing in the financial statements and meet its entire financial obligations in the near future.

At 10:31 am, the stock had climbed off the day's high and was trading 4 per cent lower at Rs 47. The stock had fallen 9 per cent from its intra-day high on the BSE. A combined 223,000 equity shares have changed hands on the counter on the NSE and BSE, so far.