LIC hikes stake in this multibagger chemical stock. Details here
Premium- LIC has hiked its stake to 3.37%, holding about 46,01,327 shares in Deepak Nitrite
State-owned insurer and investment giant Life Insurance Corporation (LIC) has increased its stake in chemical manufacturing company Deepak Nitrite, according to an exchange filing.
According to the shareholding period updated to the exchanges, LIC has hiked its stake to 3.37%, holding about 46,01,327 shares in the company. At the end of September quarter, LIC had a stake of 1.68% in Deepak Nitrite.
On Monday, Deepak Nitrite shares were trading 2.51% higher in noon deals at ₹2,596.90 on NSE. In the last one year, the scrip has surged by 152.59%.
In the last six months, the stock has rallied 33.04%.
It may be noted that the RBI had capped non-promoter share holdings at 10% for individuals and non-financial institutions.
Meanwhile, LIC, which is one of the biggest institutional investors in India’s stock market, is aiming to list on domestic bourses by March next year in an initial public offering estimated at $12 billion, set to be the country's biggest.
LIC has recently been scaling back its stock market bets. The insurer's stake in listed companies was at its lowest in 50 quarters for the quarter ended September 2021.
Deepak Nitrite is an Indian chemical manufacturing company with units located at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra and Hyderabad in Telangana.
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The Company's segments include basic chemicals, fine and speciality chemicals, performance products and phenolics. The basic chemicals segment offers sodium nitrite, sodium nitrate, nitro toluidines, fuel additives, and nitrosyl sulphuric acid.
The company, which is an established manufacturer of phenol, acetone, and isopropyl alcohol through its subsidiary Deepak Phenolics, has continued to benefit from rising prices of phenol derivatives.
Analysts at JM Financial expect “Sales, Ebitda and Earnings per share to post 18%, 18%, and 20% CAGR (compound annual growth rate), respectively, over FY21-24E". Despite an aggressive capex of ₹1,500 crore over FY23-24, they expect its return on capital employed (pre-tax) to remain 32% over FY23E-24E.
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