Stocks in the news: FCI OEN Connectors

The board of directors of the company has decided to sale off its automotive connector business to FCI Technology Services, Cochin, a 100 per cent-subsidiary of FCI Asia, Singapore, subject to the shareholders' approval and the approval of FIPB for FCI Asia to undertake the automotive connector business.

The stock fell by 7.31 per cent after the company made announcement on December 13 and 11.4 per cent in last one week. Growth of the company has been driven by the communications business, which continues to perform strongly.

The communications business has outperformed management expectations, while the automotive business has been moderately affected by some of the headwinds in the global auto industry.

Hence, the board of directors concluded that the automotive connectors business is non-core to the current strategy of the company, and that it needs to focus heavily on the fast-growing communications business.

Based on the valuation done by Varma & Varma, an independent audit firm, the board of directors fixed the sale consideration at Rs 25.82 crore plus value of fixed assets and inventories for automotive business to be acquired by the company.