Apollo Tyres rose 2.61% to Rs 200.70 at 9:48 IST on BSE after the company said that it is undertaking an exercise to rescue operations of its South African arm.
The announcement was made after trading hours on Tuesday, 16 September 2014.
Meanwhile, the BSE Sensex was up 79.88 points, or 0.30%, to 26,572.39.
On BSE, so far 2.03 lakh shares were traded in the counter, compared with an average volume of 5.96 lakh shares in the past one quarter.
The stock hit a high of Rs 203.65 and a low of Rs 198 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 16 September 2014, rising 20.18% compared with 1.49% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 1.26% as against Sensex's 5.17% rise.
The mid-cap company has an equity capital of Rs 50.90 crore. Face value per share is Re 1.
Apollo Tyres 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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