Bull-Run at Bhoruka counter.
allindia.com
Closing Price on 9/9/99 on BSE Rs 20.95
Book Value Rs 29.19
Bhoruka Gas scrip rises on takeover talks
Abhrajit Gangopadhyay
Bangalore 8 September (ET Online)
Spurred by rumours of a possible takeover by UK-based Airgas, the Bhoruka Gas scrip is on a bull-run. At the BSE on Wednesday, the scrip closed at Rs 20.95 . The scrip was quoting at Rs 4.50 in January '99 and Rs 9.30 in April.
Market sources said Airgas, which holds a 25.5 per cent stake in Bhoruka Gas, is interested in directly entering the Indian market through this avenue. Airgas had picked up its stake in Bhoruka Gas through a preferential allotment at a Rs 67.50 premium on the Rs 10 scrip and a rights issue at Rs 29.
However, the company dismisses the rumour. "We are not going to offload any further stake to Airgas," said SN Agarwal, chairman, Bhoruka Gas.
"Some brokers are spreading a rumour with the view to push up the share price," he added.
The broking community however maintains that discussions on the price are now being held abroad. "We think the price agreed upon is around Rs 80 per share," said Ramesh Bhat, a broker with the Bangalore Exchange. However, market sources feel that the real price is likely to be in the range of Rs 35-40.
Sources say that selling out makes sense because Bhoruka, though the biggest gas plant in south India cannot compete with Praxair in the southern region. Brokers felt Airgas could consolidate its presence in India by paying as little as Rs 16 crore. Moreover, the plant is going strong and has crossed the break-even point, which could be the right time for Airgas' entry, market sources said.
Bhoruka Gas produces industrial gases like oxygen, nitrogen and argon and specialises in high value added mixture gases. The gases are supplied to Isro and pharmaceutical and steel companies. The company cut down its losses to Rs 2.74 crore in '98-99 as against Rs 6.79 crore during '97-98. Profit before tax and depreciation stood at Rs 2.50 crore over an income of Rs 34.70 crore. In the first quarter of the current fiscal, the company has recorded a profit of Rs 24 lakh for the first time. |
