By Malvika Gurung
Investing.com -- Shares of the leading pig iron and grey iron castings manufacturer Kirloskar Ferrous (BO: KRFI ) surged 7.02% to Rs 200.5 apiece at 11:13 am, after zooming almost 10% earlier in the session on Friday.
The stock surge came after the company announced completing the acquisition of a majority stake in the special engineering steels Indian Seamless Metal Tubes (ISMT) for Rs 670 crore.
The stock of Kirloskar Ferrous is not the only one rising on Friday post the acquisition announcement but shares of ISMT (NS: ISMT ) also surged 5% to Rs 55.4 apiece at the time of writing.
The deal between the two companies, announced in November 2021 involves Kirloskar Ferrous investing Rs 670 crore in ISMT, states PTI.
Of this sum, the equity investment for 51.25% stake in ISMT costs Rs 476.63 crore, while Rs 194 crore is an ‘unsecured loan to the tube manufacturer’, stated the companies in a filing.
As per Sebi’s takeover norms, the transaction between the two also allows an open offer for acquiring up to 25.05% stake in ISMT, worth Rs 239.7 crore.
The proceeds of the transaction will be used to settle ISMT’s loans of about Rs 3,359 crore, stated the PTI report.
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