The scrip of Bajaj Hindustan hit the 10 per cent upper circuit on the Bombay Stock Exchange (BSE) today on the news that Unit Trust of India (UTI) has sold its stake in the company to Bajaj group companies.
Volumes were, however, not very high and when the price reached the circuit filter there were about 2,000-odd shares with outstanding buy orders on the BSE. The stock ended the day at the upper limit of Rs 62.70 on the exchange.
UTI held around 9.5 per cent (8.3 lakh shares) in the company which it sold to two Bajaj group companies, Bachhraj & Co and Jamnalal Sons.
A UTI release said the deal was done at Rs 95 a share, a substantial premium (more than 50 per cent) to the prevailing market price. Bajaj Hindustan is managed by Shishir Bajaj, who is headed for a split from the rest of the Bajaj clan. With this acquisition the promoters' stake has gone up to 60 per cent.
Bajaj Hindustan has the largest sugar refining capacities in the country with 17,000 tonne of canes-crushing capacity per day at its two mills in Uttar Pradesh.
With sugar prices at six-year lows, margins of sugar companies are under pressure. A recent government announcement allowing blending of ethanol with petrol could, however, spell good news for the sector. Ethanol is a downstream product in the making of sugar.
