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Bodal Chemicals advances after board`s nod for investment in S P S Processors

Date : 20 Mar 2017 - 14:26

The announcement was made during market hours today, 20 March 2017.

Meanwhile, the S&P Sensex was down 145.97 points or 0.49% at 29,503.02. The BSE Small-Cap index was up 39.31 points or 0.28% at 14,051.94.

On the BSE, 3.09 lakh shares were traded on the counter so far as against the average daily volumes of 1.38 lakh shares in the past one quarter. The stock had hit a high of Rs 141.90 and a low of Rs 137.80 so far during the day.

The stock had hit a record high of Rs 155 on 6 October 2016 and a 52-week low of Rs 61.05 on 17 March 2016. The stock had outperformed the market over the past one month till 17 March 2017, advancing 4.29% compared with the Sensex`s 4.15% rise. The scrip had, however, underperformed the market over the past one quarter, rising 5.81% as against the Sensex`s 11.93% rise.

The small-cap company has equity capital of Rs 21.82 crore. Face value per share is Rs 2.

S P S Processors is a company engaged in manufacturing of dye intermediates. Bodal Chemicals (BCL) will hold 70% equity stake in S P S Processors after this investment. BCL will also provide unsecured loan of about Rs 45 crore to S P S Processors to make it debt free company by retiring its existing total debt and also for expansion of its manufacturing capacities.

S P S Processors has manufacturing plant located at Kosi, Uttar Pradesh, with operational capacity to produce 250 tons per month (TPM) of H-Acid, a key dye intermediate. The plant is a zero discharge unit and only about one and half year old.

S P S Processors also has all necessary permissions to manufacture Vinyl Sulphone (VS-another key dye intermediate) as well as dyestuff, at the same plant. The board approved a plan to build a 350-TPM VS plant at the cost of about Rs 10 crore. As most of the basic infrastructure is ready at the existing plant of S P S Processors, the BCL management expects new VS plant to be operational by second quarter of FY 2O18.

This investment will help BCL to increase its manufacturing capacity of dyes intermediates by 25% and consolidate its position in the local & global markets of dye intermediates and dyestuff. This transaction will be entirely funded through internal accruals and is targeted to close before 31 March 2017 .

This acquisition is not a related party transaction and the promoters/promoter group/group companies do not have any interest in S P S Processors.

Bodal Chemicals` net profit rose 54.3% to Rs 31.56 crore on 36% rise in net sales to Rs 272.24 crore in Q3 December 2016 over Q3 December 2015.

Bodal Chemicals is engaged in manufacturing of acid, direct and reactive dyestuffs and dye intermediates for textile, leather, plastics and papermaking applications.

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