CMI promoters to take preferential route to raise stake in Co

MUMBAI: Leading cable manufacturing company CMI Ltd will issue 5 lakh shares to promoters on a preferential basis at Rs 300 per share. CMI will also merge CMI Energy with itself. The share price of CMI rose by close to 2% at Rs 174 on the BSE at around 2 pm.

CMI has called for a board meeting on Wednesday wherein it will pass the resolution for preferential allotment to the promoters and amalgamation of the two companies. The meeting for seeking approval of the shareholders will be held on March 20, the company informed stock exchanges on Monday.

The promoter stake in CMI Ltd may rise to around 45% post the preferential allotment. The promoter stake which was 39% in June 2016 rose to 42.59% as on December 2016. Global investment fund GMO capital already owns close to 10% stake in the company, which it had bought at around Rs 304 per share.

Majority of CMI’s business comes from the Indian Railways, Metros and Oil PSU’s while the rest is from ISRO and other power companies.

In the past couple of years, CMI has acquired a cable plant at Pawal in Haryana and one from General Cables at Baddi, Himachal Pradesh apart from facilities at Sarangpur in Madhya Pradesh and one at Faridabad.