Adi Finchem spikes 20% on stake sale by shareholders, open offer

NEW DELHI: Shares of Adi Finchem surged nearly 20 per cent in Thursday's trade after Prem Watsa-led Fairfax Holding made an open offer to buy 35,86,440 shares, or 26 per cent stake, of the company’s paid-up capital at a price of Rs 212 per share.

Following the development, the stock surged 19.88 per cent to hit a high of Rs 255 on BSE.

At Rs 212 per share, Fairfax valued 26 per cent of the company’s stake at Rs 76 crore and the entire company at roughly Rs 293 crore. However, the sudden spike in the stock price on Thursday pushed the market capitalisation of the company to above Rs 330 crore.

The open offer was triggered after the promoters entered into a share purchase agreement with FIH (Fairfax India Holdings) Mauritius Investments to sell 61,60,083 shares, or 44.66 per cent of their stake in the company.

An open offer is triggered when an acquirer buys shares exceeding 25 per cent of the total capital i.e. when post-acquisition shareholding of the acquirer exceeds 25 per cent. Adi Finchem has reported a 23 per cent CAGR growth over FY10-FY15. The company is targeting to achieve a CAGR growth of 25 per cent in sales and Ebitda over the next five years.

The company is proposing a Rs 100 crore Capex over next five years to (a) increase capacity, (b) reduce per unit manufacturing cost, (c) increase efficiency, (d) upgrade current product streams and (e) add of new products to the basket.