Apollo Tyres rose 1.34% to Rs 204 at 9:36 IST on BSE after the company confirmed Hungary as the location for its first greenfield facility outside India.
The announcement was made after market hours on Wednesday, 17 September 2014.
Meanwhile, the BSE Sensex was down 5.06 points, or 0.02%, to 26,626.23.
On BSE, so far 1.17 lakh shares were traded in the counter, compared with an average volume of 6.05 lakh shares in the past one quarter.
The stock hit a high of Rs 204.40 and a low of Rs 201.40 so far during the day. The stock hit a record high of Rs 217.70 on 9 September 2014. The stock hit a 52-week low of Rs 61 on 1 October 2013.
The stock had outperformed the market over the past one month till 17 September 2014, rising 23.69% compared with 2.02% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, rising 0.95% as against Sensex's 4.35% rise.
The large-cap company has an equity capital of Rs 50.90 crore. Face value per share is Re 1.
Apollo Tyres said it chose Hungary after a consideration of various factors over some of the neighbouring Central Eastern European and Asian countries. Apollo Tyres will invest 475 million euros over the next 4 to 5 years to setup this facility in the new industrial zone near Gyongyoshalasz, Hungary. Once completed, the plant will have a capacity to produce 5.5 million passenger car & light truck (PCLT) tyres and 675,000 heavy commercial vehicle (HCV) tyres per annum. This facility will produce both, Apollo and Vredestein branded tyres, and will cater to the entire European market, and will complement Apollo Tyres' existing facility in the Netherlands.
The chosen site is less than 100 km from Budapest (capital city of Hungary) and meets the needs of Apollo Tyres including having close proximity to various original equipment manufacturer as potential customers. The company will soon start the process of applying for necessary permissions and licenses to setup the facility. Similarly, the process towards Environmental Impact Assessment will be started soon. The construction of this plant is expected to start in the spring of 2015 and the first tyre is likely to roll out in early 2017, the company said.
Apollo Tyres rose 2.91% to Rs 201.30 on Wednesday, 17 September 2014, after the company announced that Apollo Tyres Africa Proprietary, a wholly-owned step subsidiary of the company in South Africa, has voluntarily initiated business rescue proceedings. It has appointed a specialist to re-structure its operations and to secure best value for all stakeholders. The evaluation by such specialist will decide the future course of action for the company in South Africa, the company said in a statement.
Apollo Tyres had entered South Africa in 2006 with the acquisition of Dunlop Tires International for Rs 290 crore in an all-cash deal. However, according to media reports, it has not been able to make the best out of the business there in the wake of uncompetitive cost structure, continuous labour unrest and related issues.
In December 2013, Apollo Tyres closed transaction to sell its South African business along with a passenger car tyre plant to Sumitomo Rubber Industries in a deal valued at $60 million. The sale included Apollo Tyres South Africa (ATSA), including the Ladysmith passenger car tyre plant, and the Dunlop brand rights that Apollo had in 32 countries of Africa. Apollo retained the Durban plant which manufactures Truck & Bus Radial (TBR) tyres and Off Highway tyres (OHT) used in the mining and construction industries. Post the transaction, Apollo Tyres continued to sell Apollo, Vredestein and Regal branded tyres in Africa, and focussed on creating and strengthening its sales and distribution network across the continent.
Apollo Tyres' consolidated net profit increased 37.4% to Rs 227.94 crore on 2.4% growth in total income to Rs 3276.53 crore in Q1 June 2014 over Q1 June 2013.
Apollo Tyres manufactures tyres and tubes for cars, trucks, farm equipment and light commercial vehicles. The company also manufactures automobile flaps and retreading materials.
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