Shares of auto component manufacturer Pricol Ltd witnessed heightened trading on the NSE this morning.
The counter witnessed heightened trading following reports that the company may make preferential allotment of shares to its Japanese collaborator Denso Corporation to enable it to double its stake to 25 per cent.
However, the Pricol management has denied any such proposal. Pricol is Coimbatore-based automotive instruments and precision engineering company
There was a report in a business channel during pre-market opening about market rumours of Denso Corporation, which holds a 12.5 per cent stake in Pricol, doubling its stake through preferential allotment of equity.
The counter witnessed intensified trading though the report did not lead to any substantial increase in stock price.
Pricol shares, which opened at Rs 16 (face value Re 1), touched a high of Rs 17.10 before drifting lower to 16.50, a loss of 40 paise.
The share had closed yesterday at Rs 16.90.The counter registered a trading volume of about 25,000 shares by 10.45 am.
Asked about the reports, Vikram Mohan, Managing Director, Pricol, responded with a “not at all’’ and said there was no such plan and there was “no such intention’’.
He said neither Pricol nor its Japanese collaborator Denso Corporation had any such intention.
It was only late last year that Pricol got the approval of shareholders to issue 45,00,000 convertible share warrants of Re 1 each on a preferential basis to PHI Capital Solutions LLP (PHI), with each warrant convertible into one equity share of Re 1 each for Rs 18 per warrant (including a premium of Rs 17).
PHI had paid Rs 4.50 per warrant (25 per cent of the issue price) as application money. It would have to exercise its warrant rights within 18 months, the company had informed the stock exchanges at that time.
Hence, reports of fresh preferential allotment raised questions about the need for raising resources or whether Pricol was planning any fresh investment.
Vikram Mohan said the earlier decision on preferential allotment was for specific purpose. The company has no plans now to make any preferential issue.
Promoters, associates' holding
Pricol promoters and their associates hold 35.66 per cent stake in the company and Denso holds 12.5 per cent stake in the Rs 9 crore equity as on June 30, 2012. The public shareholding is at 40.36 per cent. MFs, corporate bodies, NRIs, etc hold the balance stake.
In the first quarter of current fiscal, Pricol earned a net income of Rs 218.85 crore and a net profit of Rs 3.37 crore. The EPS was Re 0.38.