The shares of this leading manufacturer and exporter of a wide range of Dyes plunged over 11 percent on Friday after the company announced that it had signed a share purchase agreement to sell its entire stake to Zhejiang Longsheng, a Chinese firm.
With a market capitalization of Rs 3,742 crore, the shares of Kiri Industries are currently trading at Rs 673 per share, down by 9.21 percent from its 52-week high of Rs 740 per share. Over the past five years, the stock has delivered an impressive return of 116 percent.
About the announcement
On Friday, Kiri Industries, through a stock exchange filing, announced that it will sell its entire stake of 37.57 percent in DyStar Global to Zhejiang Longsheng. The purchaser agreed to buy 26,23,354 equity shares for a base consideration of Rs 5,782.12 crore, which is higher than Kiri Industries’ market cap itself.
Furthermore, it will infuse another Rs 173.45 crore to address any deficit in the base payment or to meet the purchaser’s responsibilities under the SPA. However, the Total Consideration is subject to adjustments under the SPA and is subject to customary closing conditions and regulatory approvals.
Zhejiang Longsheng Group Co., Ltd. engages in research and development, production, and sale of chemical products, including dyes, intermediates, additives, water reducers, and inorganic chemicals. The Company is also active in the automobile components and real estate development sectors.
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Financial Highlights
The company reported a revenue growth of 11.87 percent to Rs 179 crores in Q3 FY25 from Rs 160 crores in Q3 FY24. Additionally, it reported a net profit growth of 31 percent to Rs 177 crores in Q3 FY25 from Rs 135 crores in Q3 FY24.
The stock delivered an ROE and ROCE of 4.84 percent and 5.96 percent respectively, and is currently trading at a P/E of 11.47x as compared to its industry average of 29.67x.
Kiri Industries Limited is a prominent manufacturer of dyes, dye intermediates, and basic chemicals, serving domestic and international customers. The company’s wide variety of dye products encompasses reactive, acid, direct, and disperse dyes, plus chemicals like sulphuric acid, oleum, and thionyl chloride.
Kiri also produces intermediates, such as H-Acid, sulpho J acid, and vinyl sulphone. Products produced by Kiri are typically used across industries, including textiles, paper, automotive, leather, and home furnishings.
Written by Satyajeet Mukherjee
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