Tata Chemicals rose 8.21% to Rs 501 at 13:58 IST on BSE after the company announced sale of its urea business to Yara Fertilisers India for Rs 2670 crore.
The announcement was made during trading hours today, 10 August 2016.Meanwhile, the BSE Sensex was down 296.22 points, or 1.05%, to 27,788.94.
On BSE, so far 9.30 lakh shares were traded in the counter, compared with average daily volume of 70,416 shares in the past one quarter. The stock hit a high of Rs 509.30 so far during the day, which is also record high for the counter. The stock hit a low of Rs 456.50 so far during the day. The stock hit a 52-week low of Rs 310.05 on 26 February 2016. The stock had outperformed the market over the past 30 days till 9 August 2016, rising 4.88% compared with 1.66% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 14.10% as against Sensex's 9.72% rise.
The large-cap company has equity capital of Rs 254.76 crore. Face value per share is Rs 10.
Tata Chemicals said that its board approved selling the business of sale and distribution of urea and customized fertilisers, manufactured by the company at its plants located in Babrala, Uttar Pradesh (urea business) by way of a slump sale to Yara Fertilisers India. The lump sum consideration for the transfer of the urea business of the company by way of a slump sale pursuant to the scheme is Rs 2670 crore.
The divestment will unlock value for Tata Chemicals, strengthen its balance sheet and will help to pursue growth potentials and opportunities in line with its strategic directions, the company said in a statement.
This divestment is in line with the strategic direction of Tata Chemicals to continue to strengthen the fertiliser businesses by partnerships and/or transfer of ownership to world class companies. The urea business will now have the benefit of international network of Yara and its global expertise, it added.
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Tata Chemicals will continue to own the "Paras", "TKS" and "Daksha" brands. This transaction does not include specialty products and complex fertilisers, Tata Chemicals said.
Tata Chemicals' managing director, R. Mukundan, said that this marks a decisive move on the part of the company to move forward on its strategy to build consumer business while maintaining leadership in inorganic chemicals business and focusing the farm business through its subsidiary Rallis and Metahelix. The company is pleased to have found a strong partner to parent its urea business.
On a consolidated basis, net profit of Tata Chemicals rose 32.34% to Rs 279.65 crore on 8.55% decline in net sales to Rs 3535.51 crore in Q1 June 2016 over Q1 June 2015.
Tata Chemicals is the market leader in India's branded iodised salt segment. It is currently is the world's second largest producer of soda ash with manufacturing facilities in Asia, Europe, Africa and North America. It is a leading manufacturer of urea and phosphatic fertilizers and, through its subsidiary Rallis, has a strong position in the crop protection business. The company's Centre for Agri-Solutions and Technology provides advice on farming solutions and crop nutrition practices.
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