DCM Shriram rises after board OKs buyout of Axialls stake in Shriram Axiall

DCM Shriram advanced 2.11% to Rs 986.55 after the company said that its board has approved the proposal to acquire 17.32 lakh shares of Shriram Axiall (SAPL) from US-based Axiall LLC at a price of Rs 137.40 apiece, aggregating to Rs 23.80 crore.

Sep 14, 2021 09:09 IST capital market

Shriram Axiall is a 50:50 joint venture (JV) between DCM Shriram and Axiall LLC, USA, and the shares being acquired represent entire 50% of the paid-up share capital held by Axiall in SAPL.

As per JV agreement, Axiall LLC had given the company the option of either buying their shares in SAPL or sell the companys stake in SAPL to Axiall LLC. The board of directors of the company considered the above options and the proposal to acquire / buy entire 50% shareholding held by Axiall LLC in SAPL, has been approved by the board.

Post-acquisition, SAPL will become the wholly owned subsidiary of the company.

Shriram Axiall is engaged in the manufacture of polymer compounding. It had reported a turnover of Rs 130.61 crore for the financial year 2020-21.

DCM Shriram is a diversified company with presence agri-rural business, chlor-vinyl business and value added business (fenesta building systems- UPVC windows & doors).

The companys consolidated net profit surged 128.47% to Rs 157.87 crore in Q1 FY22 from Rs 69.10 crore in Q1 FY21. Net sales rose 1.84% YoY to Rs 1942.92 crore during the period under review.

On a year-to-date (YTD) basis, the stock has zoomed 149.15% while the benchmark Sensex has added 22.26% during the same period.

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