Shares in Apollo Tyres remained firm today on sustained institutional buying. On the BSE, the stock hit an intraday high of Rs 123.70, but settled at Rs 121.65. Around 1.93 lakh shares were traded in 2,448 trades.
A dealer at local brokerage said, "Several big institutional players were active on the counter." Of late, the stock moved in a range of Rs 110 to Rs 25, after having surged in the last few months from its May 23 low of Rs 69.70. The scrip has surged by 81.7 per cent in a few months to a 52-week (closing) high of Rs 126.70 on July 5 2002.
Apollo Tyres is currently carrying out due diligence and negotiations with Modi Rubber for taking over the assets and liabilities of the latter's tyre business.
The Modipuram plant of Modi Rubber is said to be one of the most modern tyre manufacturing plants in Asia. The plant was shut for over a year because of lack of working capital. In August 2001, the Modis suspended operations at the plant on administrative grounds.
Modi Rubber mainly supplies tyres to the commercial vehicles segment, much like Apollo Tyres does. Both companies use technical know-how from Continental AG of Germany.
Apollo Tyres recently entered into a technical alliance with Continental AG to manufacture truck radials at a new plant to be set up in Baroda in Gujarat with an investment of Rs 175 crore. As per the agreement, the Rs 1,700-crore Apollo Tyres would produce these tyres in 2004. It would have an initial capacity of 400 units daily, to be increased to 1,500 units by 2008. Besides, Continental would relocate its closed manufacturing facilities in Austria and Belgium to Baroda for about $10.5 million.
