Pricol clarifies on Minda Corp acquisition report; shares slip 10% from day's high

Shares of Pricol gave up all of their early gains in Friday's trade after issuing a clarification on Minda Corporation's proposed acquisition. The stock climbed 5.14 per cent to hit a day high of Rs 219 over its previous close of Rs 208.30. In late morning deals, the scrip slipped 5.59 per cent to hit a day low of Rs 196.65. At today's low price of Rs 196.65, Pricol declined 10.21 per cent from its day's high level of Rs 219.

Around 80.76 lakh shares changed hands today on BSE, which was more than 13 times higher compared to Pricol's two-week average volume of 61,000 shares. Turnover on the counter stood at Rs 168.64 crore, commanding a market capitalisation (m-cap) of Rs 2,423.61 crore.

On similar lines, Minda Corp also fell 1.61 per cent today, shedding their early gains.

Pricol, in an exchange filing, issued a clarification on a report of Minda Corp's proposed equity acquisition in the company. It said, "We understand from news reports in the media circulating that Minda Corp intends to acquire 15.70 per cent shares of Pricol through reverse book-building process. Our company has no information in this regard. We don't find any communication from Minda Corp to the stock exchanges regarding the said news. Minda Corp is a competitor in one of our major business segments."

The automotive components & precision-engineered products manufacturer also mentioned, "Managing Director of Pricol has issued a clarification a little while earlier reiterating that the promoter group stands fully committed to the company and that they have absolutely no intent in undertaking any secondary sale of promoter’s stake."

Pricol further stated, "We request the stock exchange to urgently get a clarification on the news item from Minda Corp and ensure that there is complete transparency on this development and if necessary, initiate an enquiry to get to the bottom of the issue."

The stock was last seen trading higher than 20-day, 50-, 100- and 200-day moving averages but lower than 5-day moving averages. The counter's 14-day relative strength index (RSI) came at 51.21. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 25.

Pricol has an average target price of Rs 168.33, Trendlyne data showed, suggesting a potential downside of 15.67 per cent. The scrip has a one-year beta of 1.54, indicating high volatility.

On the earnings front, the company's net profit jumped 54.24 per cent jumped in the December 2022 quarter (Q3 FY23) to Rs 26.76 crore against Rs 17.35 crore in the same period a year ago. Net sales rose 16.07 per cent year-on-year (YoY) to Rs 458.16 crore in Q3 FY23.

Meanwhile, Indian equity benchmarks slipped in late deals today, dragged by banks, financials, technology and pharma stocks. As of 1:06 pm, the 30-share BSE Sensex pack fell 358 points or 0.58 per cent to trade at 60,961; while the broader NSE Nifty index moved 111 points or 0.61 per cent lower to trade at 17,925.

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