Grasim Industries share price falls on sale of fertiliser operations

Grasim Industries share price fell percent in the early trade on November 13 after the company approved divestment of fertilizer business.

The company on November 12 reported a 3.30 percent jump in its consolidated net profit at Rs 1,521.40 crore for the second quarter ended September 2020 against Rs 1,472.77 crore during the same quarter last year.

Its revenue from operations was flat at Rs 18,400.25 crore against Rs 18,400.17 crore.

The company board approved the divestment of the company’s fertiliser business, Indo Gulf Fertilisers (IGF), by way of a slump sale to Indorama India Private (IIP), a subsidiary of Indorama Corporation Pte. Ltd, Singapore.

The transfer of the business will be for a lump-sum cash consideration of Rs 2,649 crore, to be paid by IIP to Grasim.

This consideration is commensurate to the strength and future potential of the business.

The company has also entered into an agreement between the company, IIPL and Indorama Corporation Pte. Limited regarding the sale and transfer of the IGF Business from Company to IIPL, pursuant to the scheme of arrangement.

“The divestment of the fertiliser business by Grasim is a strategic portfolio choice and unlocks value for the shareholders. It is in line with the strategic thrust of the company to focus on core businesses," said Dilip Gaur, MD Grasim Industries.