Sigachi Industries shares rise 4% after Q1 results, stock split & acquisition announcement

Shares of Sigachi Industries rose 4 per cent during the early trading session on Friday after the company announced its results for the quarter ended on June 30, 2023 and a handful of corporate actions including stock split and allotment of convertible warrants to select shareholders of the company.

Sigachi Industries reported a net profit of Rs 10.88 crore with a revenue from operations at Rs 84.70 crore in the June 2023 quarter. Its bottom-line stood at Rs 7.32 crore and revenue from operations came in at Rs 72.42 crore in the preceding March 2023 quarter.

The company board of Sigachi Industries approved the sub-division of its equity shares in a 1:10 ratio. It means each share of the company with a face value of Rs 10 each will be split into 10 equity shares with a face value of Re 1 each. The record date for the purpose of sub-division of equity shares will be intimated subsequently, after the approval from the shareholders.

Following the announcement, shares of Sigachi Industries surged 4 per cent to Rs 355.95 on Friday, before giving up its gains partially. The company was commanding a total market capitalization around Rs 1,075 crore. The scrip had settled at Rs 344.5 on Thursday.

The board also approved allotment of 1,09,75,000 convertible warrants at an issue price of Rs 261 apiece amounting to Rs
Rs 286.45 crore to promoters and non-promoters in aggregate, as approved earlier by the general body and in terms of the in-principal approval accorded by the exchanges, it said in the exchange filing with a bourse.

"Sigachi Industries will also acquire 2,88,00,000 equity shares of Trimax Bio Sciences for Rs 100 crore, constituting 80 per cent of the paid-up equity share capital of the company. The acquisition of balance 20 per cent equity share capital will be done after 3 years for a sum of Rs 25 crore, or 8.5 times of EBITDA multiples, whichever is higher with purchasers’ call option," the filing said.

Sigachi Industries made its debut at Dalal Street in November 2021, when the company raised Rs 125.43 crore through its initial stake sale by selling its shares in the range of Rs 161-163 apiece. The stock is currently trading about 120 per cent higher from its issue price.

Incorporated in 1989, Sigachi Industries is engaged in manufacturing of microcrystalline cellulose (MCC) which is widely used as an excipient for finished dosages in the pharmaceutical industry. MCC has varied applications in the pharmaceutical, food, nutraceuticals, and cosmetic industries.

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