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Wednesday, May 05, 2004

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Pvt placement rumours drive up Amtek Auto

Our Bureau

Mumbai , May 4

THE stock of auto-ancillary company Amtek Auto gained sharply in Tuesday's trading on market talk that the company was planning to make private placement of shares to select foreign investors.

The stock is on rise also due to the company's good financial performance in the last fiscal; the performance is likely to be maintained in the current fiscal also.

In Tuesday's trading, Amtek gained 14.53 per cent to Rs 708.25 on the BSE, with volumes of 3.23 lakh shares, and on the NSE, it closed at Rs 708.70, up 13.87 per cent, with volumes of 4.44 lakh shares.

Since the beginning of April, the stock price of the company has increased from Rs 406 to Tuesday's closing price of Rs 708.25 on the BSE — a gain of almost 75 per cent. Brokers said there has been active buying in the stock over the last month. "Several mutual funds and FIIs are actively buying the shares," said a dealer with a domestic broking firm.

The FIIs' holding in the company recently touched 22 per cent, and following this, the company had hiked the FIIs' investment limit to 49 per cent. "After the hike in the FIIs' limit, more foreign investors are buying the shares of the company," said a dealer. He said there is a possibility of placement of company's shares to select FIIs at a price higher than the ruling market price.

The recent acquisition of UK-based GKW Group by the company is also leading to increased interest in the counter. "The impact of this acquisition is likely to be seen in the current fiscal," said an analyst.

He said the company had taken various initiatives in the auto-ancillary business and the market is discounting them now. For instance, the company acquired various companies in India and abroad over the last couple of years and this is likely to be relected in the company's top and bottomline.

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