RHI Magnesita India climbed over 5 percent on Monday, November 21, after the company announced that it is in the process of acquiring Dalmia Bharat Refractories for about ₹1,708 crore.
The stock opened at ₹663 per share, up from the previous close of ₹645.35 and rallied further to touch an intraday high of ₹679.80. At 12:45, it was trading at ₹675.70, up 4.70 percent.
The stock touched a 52-week high of ₹738.70 on October 20, 2022 and a 52-week-low of ₹323.30 on November 22, 2021, indicating that at the current level, the stock is trading at 110 percent above its 52-week low and just 8 percent below its 52-week high.
The stock has grown nearly 23 percent in the last six months. In the past one year, it has given a positive return of over 100 percent.
Stefan Borgas, CEO of RHI Magnesita, on Sunday said, “DBRL will transfer its business to Dalmia OCL (DOCL). Under the terms of a share swap agreement, RHI Magnesita will acquire all outstanding shares in DOCL in exchange for 27 million new shares in RHI Magnesita India Limited. Based on the issuance price of RHI Magnesita India Limited at ₹632.5029 per share, the share consideration had a value of approximately ₹1,708 crore (about 208 million euros).”
The acquisition will significantly increase RHI Magnesita's presence in the fast-growing Indian refractory market, with steel production in India expected to grow 12 percent in 2022, and at a 7-8 percent compound annual growth rate until 2030.
It will also add production capacities in important industrial regions in the south and west region where RHI Magnesita currently has no asset, he added.
The company reported an increase of 67.59 percent in the net profits in the quarter that ended September 2022 as compared to ₹43.10 crore during the same quarter last year.
RHI Magnesita India Ltd offers a range of refractory products and mixes to its customers in steel, cement and lime, non-ferrous metals, glass and other industries.
According to a Mintgenie poll, 2 analysts have a ‘STRONG BUY’ call on the stock.