Kalyani Steels shares hit upper circuit of 20% in early trade; here's why 

Shares of  Kalyani Steels Ltd hit upper circuit of 20% in early trade today after the company said it has emerged as the successful bidder for the acquisition of assets of Kamineni Steel & Power India Private Ltd. Kalyani Steels shares rose 20% to a record high of Rs 623.75 against the previous close of Rs 519.80 on BSE. Shares of the iron and steel maker opened higher at Rs 550.20 on BSE. Total 1.74 lakh Kalyani Steels shares changed hands amounting to a turnover of Rs 10.24 crore on BSE. 
Market cap of the firm rose to Rs 2673.97 crore  on BSE. The stock has gained 68.5 percent in a year and risen 117% in three years.

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In terms of technicals, the relative strength index (RSI) of the stock stands at 59.1, signaling the stock is trading neither in the overbought nor in the oversold zone. Shares of Kalyani Steels are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 

Kalyani Steels shares have a one-year beta of 0.5, indicating low volatility during the period.

"The company has been declared as a successful bidder for the acquisition of assets of Kamineni Steel & Power India Private Limited under the invitation for the sale of Assets through e-auction platform, under Insolvency and Bankruptcy Code, 2016," the company said in a regulatory filing on January 10.

The acquisition, which was executed through an e-auction platform under the Insolvency and Bankruptcy Code, 2016, will help Kalyani Steel broaden its presence in the steel manufacturing sector.

The assets slated for acquisition are land, buildings, and plant machinery which are located in Yellareddigudem and Cheruvugattu villages in Nalgonda district, Telangana.

The total area is 143.82 acre, hosting a 350,000 MTPA steel billet plant and associated facilities. Kalyani will pay Rs 450 crore in cash for the acquisition, with an initial deposit of Rs 23 crore already submitted as earnest money.

The remaining balance is due on or before April 7, 2024, with no interest charged if paid by February 7, 2024. Subsequently, interest will be applicable at the rate of 12 percent per annum until the date of payment.

Kalyani Steels Limited is engaged in the business of manufacturing and sale of iron and steel products. The company's segment includes forging and engineering quality carbon and alloy steels. The company is an integrated manufacturer of a diverse range of steel products with its manufacturing facility located at Hospet Works in Karnataka.