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Shares of Huhtamaki tumbled five per cent in early trade on Tuesday after the company said it plans to acquire assets and operations of Mohan Mutha Polytech Private Ltd for ₹80 crore.
In a post market disclosure on Monday, the company said it has executed a business transfer agreement to acquire the entire flexible packaging business of Mohan Mutha Polytech on a slump sale basis.
The deal is likely to be completed by December 2019, it further added.
Shares of the company plunged to a low of ₹229.20 on the NSE and are currently ruling at ₹232.90, down 4.61 per cent, over the previous day’s close of ₹244.15. The stock posted a year-to-date return of 19.85 per cent as against the BSE Sensex’s 7.54 per cent.
The Chennai-based Mohan Mutha Polytech is a flexible packaging converter in India having a manufacturing facility at Sri City, Andhra Pradesh with an installed capacity of 5,400 tpa.
The acquisition allows Huhtamaki to speed up its growth in India by improving its capacity to serve customers in South India.
MMPPL has approximately 160 employees and its revenues in FY2019 were ₹76.20 crore.
For financial year 2018, the company had posted a profit of ₹34.89 crore and revenues of ₹2,369.07 crore. For Q2 of FY19, it had recorded a profit of ₹27.93 crore and revenues of ₹633.75 crore.
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