The shares of the iron ore manufacturer gained up 5 percent after the company announced execution of a binding agreement for acquisition Arjas Steel Private Limited worth Rs 3,000 crore.
With a market capitalization of Rs 8,920.83 crore, the shares of Sandur Manganese & Iron Ores Ltd were trading at Rs 550.55 per share, increasing around 1.12 percent as compared to the previous cloning price of Rs 544.45 apiece.
According to the company filing, Board of director of Sandur Manganese & Iron Ores Ltd has considered and approved strategic business acquisition through purchase of 80% equity share capital of Arjas Steel Private Limited (ASPL), worth Rs 3000 crore. Additionally, 19.12% (approx.) stake in Arjas Steel Private Limited will be acquired by BAG Holdings Private Limited.
Furthermore, this strategic acquisition accelerates SMIORE’s integration aspirations into steel and value-add goods, opening up opportunities for synergies and integration. Arjas is a top 5 special steel company in India, servicing the automotive sector.
Moreover, Arjas has two factories spanning across almost 950 acres: its main production site in Andhra Pradesh and another one in Punjab through its wholly-owned subsidiary Arjas Modern Steel Private Limited. Arjas is expanding both plants to increase capacity and downstream capabilities.
Looking into Sandur Manganese & Iron Ores Ltd’s performance, revenue decreased by 60 percent from Rs 387.92 Crore in Q3FY23 to Rs 153.02 Crore in Q3FY24. During the same time frame, net profit decreased by 76 percent from Rs 55.79 crore to Rs 12.89 crore.
The firm has increased capacity for manganese ore production from 0.28 MTPA to 0.46 MTPA, with plans to raise to 0.58 MTPA. Iron ore production capacity has increased from 1.60 MTPA to 3.81 MTPA, with plans to grow further to 4.50 MTPA.
The stock has delivered multi-bagger returns of 118.72 percent in the last six months and 106.28 percent in a year. A shareholder’s investment of Rs. 1 lakh in the company would be worth Rs. 2.06 lakh in a year.
The Sandur Manganese and Iron Ores Limited mines manganese and iron ores in Deogiri village, Sandur Taluk, Bellary District, Karnataka. The company manufactures ferroalloys and coke at its Vyasanakere, Hospet facility. Its sectors include mining, ferroalloys, coke, and energy.
Written by:- Abhishek Singh
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