GHCL spurts on stake sale buzz

GHCL was locked at upper limit of 20% at Rs 53.75 at 10:36 IST on BSE on reports Middle East based Al Rostamani Group is in negotiations to pick up 25% stake in the company.

Meanwhile, the BSE Sensex was up 267.63 points, or 1.82%, at 15160.16, on positive cues from Asian markets and on further fall in crude oil prices.

On BSE, 9.92 lakh shares were traded in the counter. The scrip had an average daily volume of 5.01 lakh shares in the past one quarter.

The stock had a 52-week high of Rs 208.40 on 24 December 2007 and a 52-week low of Rs 44.30 on 10 June 2008.

The scrip had underperformed the market over the past one month till 10 June 2008, falling 47.63% compared to the Sensex's 11.69% decline. It had also underperformed the market in the past one quarter, falling 53.09% compared to Sensex's 7.68% fall.

The small-cap chemicals maker has an equity capital of Rs 100.02 crore. Face value per share is Rs 10.

The current price of Rs 53.75 discounts its Q4 March 2008 annualised EPS of Rs 5.38, by a PE multiple of 9.99.

According to reports, the value of the deal could be up to Rs 860 crore and would be at a substantial premium to the current market price of the firm. The deal would trigger an open offer for GHCL, the reports added.

GHCL is a diversified firm that manufactures soda ash and makes, distributes and retails home textile in India and abroad. The home textile manufacturing and retailing operations of the company are likely to be hived off into two separate firms leaving the parent company with the soda ash business.

The Al Rostmani Group is a large trading house with interests in automobiles, heavy vehicles, spare parts and services, travel, foreign exchange, real estate and infrastructure.

The net profit of GHCL plunged 58.4% to Rs 13.45 crore on a 22.3% rise in sales to Rs 305.46 crore in Q4 March 2008 over Q4 March 2007.