ICRA stock rises 17.61% on Moody's revising open offer bid

The share price of ICRA Ltd jumped 17.61% to close at to Rs 2,352.10 on May 28 after the announcement that Moody's Investor Services (Moody's), ICRA's parent, has revised its open offer bid price by 20% to Rs 2,400 against Rs 2,000 announced in February 2014, which itself was a 26% premium to its price then.

On Wednesday, it also touched its 52-week high of Rs 2,400.

The share price of the company has risen 47.5% till May 28 against Rs 1,594.20 on 21 February 2014 when the open offer was first announced.

Moody's has announced an open offer to increase its stake in ICRA from 28.5% to 50% minimum and 55% maximum via an open offer of a minimum of 21.5% and maximum of 26.5%. However, it is a conditional offer and subject to a minimum level of acceptance of 21,49,101 equity shares representing 21.5% of the voting share capital.

According to Edelweiss Securities, the event reiterates our conviction of a strong scope of increase in outsourcing revenue from the parent's end. ICRA provides offshore rating services to Moody's, which contributes around 14% to the former's rating revenue versus Crisil's 33% contribution from this segment. The research house is positive on the credit rating industry led by strong financial metrics with high return ratios and high free cash flow generation.

On the BSE, the traded volume of ICRA spurted to 17.10 times on May 28 against 3.31 a day before.