Readymade Steel India lost 0.64% at Rs 70.40 at 10:38 IST on BSE after the firm said its Singapore subsidiary has entered into a conditional sale & purchase agreement with PSL Holdings for the acquisition of entire share capital of two of its units.
The announcement was made after market hours on Monday, 2 September 2013.
Meanwhile, the S&P BSE Sensex was down 155.22 points or 0.82% at 18,730.91.
On BSE, 6,676 shares were traded in the counter as against average daily volume of 10,961 shares in the past one quarter.
The stock was locked at an initial 5% upper circuit at Rs 74.35. The stock hit a low of Rs 69.85 so far during the day. The stock had hit a 52-week low of Rs 36.25 on 10 April 2013. The stock had hit a 52-week high of Rs 111 on 15 November 2012.
The stock had outperformed the market over the past one month till 2 September 2013, rising 3.2% compared with the Sensex's 1.45% fall. The scrip had also outperformed the market in past one quarter, gaining 1.14% as against Sensex's 4.42% fall.
The small-cap company has equity capital of Rs 11.72 crore. Face value per share is Rs 10.
Readymade Steel India (RMS) said that its subsidiary, KH Foges Pte in Singapore has entered into a conditional sale & purchase agreement (SPA) with PSL Holdings, for the acquisition of the entire share capital of PSL's wholly owned subsidiaries, PSL Engineering Pte (PSLE) and Rotary Piling Pte (RPL).
The aggregate consideration for the acquisition shall be about Rs 80 crore to Rs 100 crore as per the terms of the conditional SPA. The acquisition is likely to be completed before the end of the year, RMS said in a statement.
Mr. Anil Agrawal, MD, RMS said, "PSLE and RPL have been engaged in their respective businesses for over 25 years and posses infrastructure and experienced manpower for conduct and growth of the business activities which we plan to achieve under new leadership. The proposed acquisition reflects KH Foges' efforts towards continuous upgradation of its capabilities through acquisition of new technologies and investment in the development of human resource competencies which are key strategies employed by KHF to advance towards the leadership position in this field and compliments the vision of being the foundation engineering specialist in South East Asia."
PSLE specializes in the provision of micro-piling, civil, mechanical, construction and ground engineering works.
RPL is a specialized contractor of bored piling, civil, mechanical and ground engineering works.
KH Foges Pte is the second largest specialist contractor in foundation engineering works in Singapore. In 2012, Readymade Steel India acquired a majority stake in KH Foges Pte through its wholly owned subsidiary, Ready Made Steel Singapore Pte.
Readymade Steel India's consolidated net profit surged 27.8% to Rs 11.72 crore on 2.7% growth in net sales to Rs 140.52 crore in Q1 June 2013 over Q1 June 2012.
Readymade Steel India's product offerings include ready to use steel, primarily re-bars to be used in construction activities in various sectors like roads, power plants, ports, airports, housing, bridges, metros, monorails etc.
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