The Usha Martin stock rose in early trade after the firm said it would explore to sell its steel business to reduce debt. It has Rs 3,700 crore debt burden on its books. The stock of country's largest wire rope manufacturer rose up to 11.86% at 33 level, its fresh 52-week high on the BSE. At 10:44 am, the stock was trading 5.08% higher at 31 level on the BSE. The stock rose 4.61% to close at Rs 29.50 on the BSE on Monday. The stock has been gaining for the last five days and has risen 56.39% during the period. It opened with a gain of 9.49% today. The stock has clocked 63.25% returns during the last three months compared to the sector return of 5.67%. The stock has gained 66.40% during the last one year and 26.06% returns since the beginning of this year.
However, the firm reported a loss of Rs 268.79 crore in 2017-2018 compared with loss of Rs 359.52 crore in 2016-17. The firm paid Rs 586.98 crore in interest on loans in last fiscal compared with Rs 564.24 crore in interst payments ion 2016-17. It reported Rs 12.22 crore in net profit for Q4 of last fiscal compared with a loss of Rs 149.82 crore in the corresponding quarter of 2016-17. The firm has set up a committee to evaluate proposals to sell its steel business.
"The Board of Directors at its meeting held today has decided to explore the sale of its steel business in order to achieve the objective of deleveraging the company," Usha Martin said.
Its board has also reconstituted the committee of Independent Directors to appoint investment banks, consultants and advisors to help evaluate proposals and oversee the process for the sale of its steel business.
However, "any actual sale of the business will only be undertaken by the company after due consideration and by following due process of law by obtaining appropriate approvals from the board, regulators, shareholders and lenders, as applicable," the company said.
This is not the first time the company has made an announcement related to plans for selling its steel business. Last year in September, Usha Martin had said it is contemplating to sell its wire rope or steel business for which it has appointed a consultant also.
"We have hired a consultant which will prepare a roadmap for the company. Selling off one of two divisions (steel and wire rope) is also contemplated," Managing Director of Usha Martin Rajeev Jhawar had told reporters earlier.
According to the company's website, Usha Martin is among the largest wire rope manufacturer in the world and a leading speciality steel producer in India. The company's segments include steel, wire and wire ropes, and others.
The steel segment includes steel wire rods, rolled products, billets, pig iron and allied products. The wire rope manufacturing facilities located in India, UK, UAE, and Thailand produce one of the widest range of wire ropes in the world.