Pipavav Defence and Offshore Engineering Company fell 3.68% to Rs 61.50 at 14:46 IST on BSE, extending recent decline triggered by Reliance Infrastructure acquiring the company with sole management control.
Reliance Infrastructure (R-Infra) made the announcement after market hours on Wednesday, 4 March 2015.
Shares of Pipavav Defence and Offshore Engineering Company (Pipavav Defence) have fallen 19.61% in three sessions from Rs 76.50 on Wednesday, 4 March 2015.
Meanwhile, the BSE Sensex was down 191.18 points, or 0.66%, to 28,653.60.
On BSE, so far 24.60 lakh shares were traded in the counter, compared with an average volume of 29.42 lakh shares in the past one quarter.
The stock hit a high of Rs 64.65 and a low of Rs 61.35 so far during the day. The stock hit a 52-week high of Rs 85 on 19 February 2015. The stock hit a 52-week low of Rs 33.25 on 26 March 2014.
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The stock had outperformed the market over the past one month till 9 March 2015, rising 21.50% compared with 2.19% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 47.80% as against Sensex's 3.77% rise.
The mid-cap company has an equity capital of Rs 736.21 crore. Face value per share is Rs 10.
R-Infra announced the acquisition of 18% stake in Pipavav Defence at Rs 819 crore, gaining management control. R-Infra has agreed to acquire 13 crore equity shares of Pipavav Defence at Rs 63 each, a 17.65% discount to Pipavav Defence's closing price of Rs 76.50 on Wednesday, 4 March 2015.
Reliance Defence Systems, a subsidiary of Reliance Infrastructure, will also make an open offer to acquire another 26% in Pipavav Defence for Rs 66 per share.
As per the agreement with the promoters, R-Infra will also acquire from them additional equity shares at Rs 63 per share to ensure that Reliance's shareholding is not less than 25.10%, according to the press release. Anil D Ambani, chairman, Reliance Group, will become the chairman of the company, which will be renamed Reliance Defence.
Post the transaction, the existing promoters of Pipavav Defence will continue to retain a minority stake in the company, together with two non-executive board seats.
As on 31 December 2014, promoters owned 44.50% stake in Pipavav Defence
Pipavav Defence & Offshore Engineering Company reported net loss of Rs 70.22 crore in Q3 December 2014 as against net loss of Rs 4.77 crore in Q3 December 2013. Net sales declined 20.08% to Rs 250.96 crore in Q3 December 2014 over Q3 December 2013.
Pipavav Defence is an integrated defence, heavy engineering and offshore oil & gas assets construction company.
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