Hind Lever Chemicals and Tata Chemicals rallied on Wednesday on good buying support, following reports that the former will merge with the latter.
The stocks of both the companies advanced. HLC was locked at 10% upper limit of the circuit breaker at Rs 187, while TCL jumped by 9.89% to Rs 66.65.
Relatively higher volumes accompanied the surge on these counters in early-afternoon trades. HCL recorded a volume of 31,732 shares, while TCL registered over 840,000 shares on the BSE till 12:40 IST.
The rise in these scrips was purely on the announcements by the board of directors of both the companies that they will meet on 24 January 2003, to consider the merger of HLC with TCL. The boards will also consider the share exchange ratio for the proposed merger, taking into account the recommendations of the valuers.
Analysts said the merger of HLC with TCL is good for both the companies, but the crucial matter is the share-swap ratio. They said the two companies have business synergies. HCL manufactures Di-ammonium Phosphate while TCL produces Urea.
Meanwhile, for the second quarter ended 30 September 2002, HCL registered a 26% fall in net profit to Rs 7.40 crore on a 11.5% increase in net sales to Rs 300.59 crore (Rs 3 billion). TCL recorded a 8.34% rise in net profit to Rs 47.03 crore on a 19.38% increase in net sales to Rs 439.07 crore (Rs 4.39 billion).
BSE Codes: 506737, 500770