Mukand zooms 38% in 2 days on transfer of land at Thane for Rs 802 crore

Shares of Mukand rallied 15 per cent to hit a fresh 52-week high of Rs 79.80 on the BSE in intra-day trade on Wednesday on the back of five-fold jump in trading volumes.

The stock has zoomed 38 per cent in just two trading days after the company announced that it has completed the transfer of approximately 55 acres of surplus leasehold land at Thane to NTT Global Data Centers Nav2 and received total consideration of Rs 801.51 crore, including taxes, which shall, amongst other things, be utilised for debt repayment of the company.

Mukand has also completed the sale of the first tranche of shares in the joint venture, Mukand Sumi Special Steel (MSSSL) to Jamnalal Sons and received a consideration of Rs 713.61 crore, the company’s chairman Niraj Bajaj and co-chairman Rajesh V Shah said in a communication to shareholders.

The second and final tranche of sale of shares worth Rs 500 crore will be completed in April, Q1 of FY 2021-22. This amount will be utilised for further debt repayment, they said.

The company will continue to retain ownership of its alloy steel manufacturing assets in Ginigera, Karnataka, and the income derived from sale of its alloy steel products to the joint venture, MSSSL.

The management said during the financial year 2020-21, the company reduced its debt and other interest-bearing liabilities by more than Rs 975 crore. With this considerable reduction in interest rates, the total finance costs for the company have reduced substantially and are expected to be further brought down in the coming years, thereby improving the profitability of the company substantially, it added.

The company said the main businesses viz. alloy steel and stainless steel have been performing very well and the demand for all company products is robust and expected to remain strong in the coming years as well.

At 12:47 pm, the stock was trading 13 per cent higher at Rs 78.70 on the BSE as compared to a 0.89 per cent rise in the S&P BSE Sensex. A combined 2.1 million equity shares have changed hands on the counter on the NSE and BSE so far.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link