Shares of GMM Pfaudler were locked in the 5 per cent upper circuit band at Rs 3,821 on the BSE on Tuesday, rebounding 11 per cent from its early morning low of Rs 3,458 a piece. The stock reversed its recent correction when it fell over 40 per cent in the past two weeks.
The stock of the company which manufactures glass-lined equipment for the pharmaceutical and chemical industries, has fallen below its offer-for-sale (OFS) price of Rs 3,500 per share. In the past two weeks, the stock has corrected 42 per cent after GMM Pfaudler announced that promoters plan to sell 17.6 per cent stake in the company and fixed the floor price of the sale at a steeply discounted price.
The counter has seen huge activities, with trading volumes on the counter jumping multiple-fold today. A combined 1.7 million equity shares changed hands and there were pending buy orders for 38,000 shares on the NSE and BSE till the time of writing of this report.
Meanwhile, GMM Pfaudler said on Tuesday that the current financial year was expected to be very strong. The company started the year with a very strong performance in Q1 and that the company’s order backlog has reached the highest it has ever been.
“We are about a 1000 glass-lined equipment backlog. We have our Hyderabad facility that will come online in the next 5 to 7 days, so we have additional output going from there. We have two new gas furnaces which have already reached our factory and should be started in the next 2 or 3 weeks. So we can timely switch-off our electric furnaces and all our production will come out of the gas furnaces now. Both the chemical and pharmaceutical sectors will continue to grow and we will be happy to ride on the back of those two industry segments,” the company said in a call with investors.
Furthermore, the company said that it is willing to co-operate with any agency that may want to look into allegations of unusual positions being taken around the time of the offer for sale. There were reportedly positions taken in the stock lending and borrowing mechanism (SLBM) segment around the time of the announcement.
GMM Pfaudler will acquire 54 per cent of the global business of Pfaudler International under the announced deal. The Patel family, which is part of the promoter group, will acquire another 26 per cent stake. The offer for sale which triggered the slide was part of the restructuring. The Patel family and Pfaudler Inc are part of the promoter group at GMM Pfaudler. CLICK HERE FOR CALL DETAILS