Bata gets rights issue booster

DALAL STREET SPIKES

The Bata India stock spurted on the announcement of rights issue at Rs 54, a substantial discount to the ruling market price. The stock was up more than 8 per cent to touch a high Rs 103.55 in intra-day trades before closing at Rs 96.25, up 2.33 per cent from its previous close. More than 12.59 lakh shares were traded at the counter on BSE on Monday.

An equity analyst handling PMS at a domestic broking firm said, "The rights issue is attractively price because of which the stock moved sharply in intra-day trades on Monday. Investors will get the benefit from the short-term loss by applying for the rights issue which will infuse the desired liquidity in the counter."

The company has fixed April 25 as a record date and investors will get four rights issue for every share held. Bata will raise nearly Rs 70 crore from the rights issue.

The rights issue will help it meet its working capital requirements, the company said. The proceeds of the rights issue would also be used to finance some of the new initiatives to help make the business more profitable.