Shares of Widia India moved into stronger territory today on reports that its foreign promoter would buy 56.44 lakh shares from the Indian promoter. The scrip of the Bangalore-based carbide cutting tools manufacturer climbed to an intra-day high of Rs 90.65 to close at Rs 87.65, up by 7.81 per cent on the BSE. A total of 7,730 shares of Widia India shares changed hands on the exchange. From Rs 50 on March 11, 2002, Widia India soared 62.6 per cent to Rs 81.30 on May 28, 2002.
The stock was boosted further today by news that the company's board has approved the sale of 56.44 lakh shares belonging to Indian promoter SAK Industries, to the foreign promoter, Meturit A G. Meturit currently has a 51 per cent stake in Widia India and its stake will now go up to 80 per cent (maximum).
Widia India operates in the machine tools segment. The company manufactures carbide-cutting tools and is a leader in the cutting tool segment with a market share of 40 per cent.
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The machine tools industry is cyclical in nature and sales and earnings are linked to industrial trends. The cutting tools sector of the machine tool industry is better placed as cutting tools also have replacement demand.
In the machine tools segment, the major players are HMT, Ace Designers and Batliboi. Most companies are either very small or not listed.
For the first quarter ended March 31, 2002, Widia reported a net loss of Rs 2.76 crore as against a net profit of Rs 0.15 crore in the first quarter ended March 31, 2001. Net sales rose 2.7 per cent in first quarter to Rs 33.53 crore.