Gujarat Apollo hits upper circuit after JV announcement

New Delhi: hit an upper circuit on Tuesday after the company announced its joint venture (JV) with Belgium-based PFH BV.

The company informed the bourses that it signed a JV contract with the Belgium based company PFH BV (Keestrack) for agricultural and farming machinery and components on Monday, September 12.

"Apollo and Keestrack have decided to work jointly and in cooperation with each other for the purposes of carrying on the business of agricultural and farming machinery and components," the exchange filing said.

Following the announcement, shares of Gujarat Apollo Industries hit an upper circuit of 20 per cent to Rs 235.35 on Tuesday. The scrip had closed at Rs 196.15 in the previous trading session.

Both the companies will form a JV, which will be incorporated in India to ensure efficiencies and allow the shareholders to offer improved products in the market, by harnessing each other's synergies.

However, the regulatory filing did not clarify the ratio of the joint ventures but it is likely to be 50:50 as both the entities will subscribe to 2 lakh equity shares of Rs 10 each of the newly incorporated entity. The additional subscription will be done in a phased manner.

The directors on the board of the joint venture company will be in the proportion of their shareholding in the new company. One of the Directors of Gujarat Apollo Industries, listed entity, will be on the board of the new Joint Venture.