Minda Corp among losers
Minda Corporation is right there among the top five losers on the BSE since the morning bell today; the stock price fell 3.5% to hit an intraday low at Rs.195.75. Its 52-week low stands at Rs.163.55. The aggressive and hostile stake buy of Pricol does not seem to have gone down well.
Speaking with the investors on Sunday, the company said that the purchase of 15.7% stake in Pricol for Rs 400 crore from the open market on Friday was just a financial investment, as of now. The company said that its primary focus was organic growth.
Akash Minda, executive director of the company said that there is a mandate to deploy cash and after analysing the performance of Pricol, they had concluded that this was the best use of the funds.
After this investment, the company’s debt-to-equity ratio will be about 0.3x and debt-to-EBITDA will be 1:1.
Following this stake buy, some brokerage houses have downgraded the stock as they feel that this is EPS dilutive in the short to medium term and not a very prudent way to utilize the QIP proceeds.