Indo Gulf Corporation witnessed huge volumes on Monday, figuring as the third-largest traded stock on BSE.
Volumes touched 2.48 million shares on BSE. Yet the scrip traded flat late in the day, down 0.09% to Rs 52.75. Between 28 November 2002 and 7 February 2003, the scrip of Indo Gulf rose 16% to Rs 52.80 from Rs 45.55.
As per market talk, Enam Securities was an active buyer of the diversified company's stock today. The low valuation of the scrip is prompting the buying, market watchers say.
Earlier the company announced that the composite scheme of arrangement between the company, Indo Gulf Fertilisers and Hindalco Industries and their respective shareholders and creditors was approved by the shareholders and creditors of the company and sanctioned by the Mumbai High Court. The scheme of arrangement envisages the de-merger of the fertiliser business of Indo Gulf Corporation to Indo Gulf Fertilisers and the amalgamation of the remaining business of Indo Gulf Corporation into Hindalco Industries .
However, the scheme has not yet been effected as certain consents are awaited.
For the purpose of the amalgamation, one equity share in Hindalco of the face value of Rs 10 each will be swapped for every twelve equity shares held in Indo Gulf Fertiliser. Hindalco is currently trading at Rs 600, while IGF is quoted at 52.75, which means that the price of fertiliser business has not been taken into consideration in the current IGF price. This is why accumulation is going on on the counter .
For the third quarter ended 31 December 2002, the diversified company registered a 20% rise in net profit to Rs 105.55 crore (Rs 1.05 billion) on a 12% increase in net sales to Rs 854.68 crore (Rs 8.54 billion).
For the quarter, the fertiliser segment reported a spectacular 73% surge in PBIT to Rs 25.49 crore, despite a modest 4% increase in turnover to Rs 124.81 crore (Rs 1.24 billion) in the quarter ended December 2002 over the corresponding previous quarter. While the sales of the copper business increased by 13% to Rs 729.87 crore (Rs 7.29 billion) in Q3. However, the PBIT of this segment increased by a mere 1% to Rs 132.27 crore (Rs 1.32 billion), in view of the pressure on margins. The fertiliser business' contribution to sales has been coming down, in view of the robust increase in copper sales. However, the contribution to PBIT has zoomed.
BSE Code: 500723
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