Apollo Tricoat Tubes surged 8.20% to Rs 1000 after its board approved a draft scheme of amalgamation of the company and Shri Lakshmi Metal Udyog with APL Apollo Tubes.
The scrip gained 10.36% to hit an intraday high of Rs 1,020 in trade today, which is also a record high for the counter.
Meanwhile, shares of APL Apollo Tubes shed 0.12% to currently trade at Rs 1069 on the BSE.
APL Apollo and Apollo Tricoat are engaged in the business of production of ERW steel tubes. Shri Lakshmi is engaged in the business of production of ERW steel tubes and GP Coils.
The amalgamation would combine the businesses under "APL Apollo" brand with wide product offerings and geographical footprint leading to a stronger market presence.
Shri Lakshmi and Apollo Tricoat operate businesses that complement each other and the combination would result in stronger consolidated revenue and profitability, with diversification in product portfolio.
The scheme does not involve payment of any cash consideration. The amalgamation is a tax neutral transaction.
As the entire, issued, subscribed and paid up share capital of Shri Lakshmi is held by APL Apollo and its nominees, upon the scheme being effective, the equity share capital of Shri Lakshmi shall stand automatically cancelled and there will be no issue and allotment of shares to APL Apollo or the nominees as APL Apollo and its nominees are the only shareholders of Shri Lakshmi.
Upon coming into effect of the Scheme and in consideration for the amalgamation of Apollo Tricoat into and with APL Apollo pursuant to the Scheme, APL Apollo shall issue and allot to the shareholders of Apollo Tricoat one equity share of Rs 2 each of APL Apollo for every 1 equity share of Rs 2 each of Apollo Tricoat.
The appointed date for merger is 1 April 2021 and the transaction is expected to be completed by the third quarter FY2022.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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