Jyothy Laboratories surges 14% as Henkel may get time to buy 26% stake in company

NEW DELHI: Shares of Ujala fabric whitener Jyothy Laboratories surged as much as 14 per cent and hit their fresh 52-week high of Rs 421 in morning trade on Monday after reports that the deadline for Henkel AG to exercise its option to acquire a 26 per cent stake in Jyothy Laboratories may be extended to November, as the German consumer goods firm is keen to take at least a 50 per cent ownership in its Indian partner gradually.

The scrip was trading 13.98 per cent up at Rs 421 around 10.35 am (IST). Shares of the company opened at Rs 375 and touched an intraday high and low of Rs 424.25 and Rs 375, respectively, in trade so far. Benchmark BSE Sensex was trading 27.17 points, or 0.09 per cent, down at Rs 29434.28.

On the BSE, 56,000 shares were traded on the counter so far as against the average daily volumes of 13,000 shares in the past two weeks.

The deal will provide Henkel an entry point in India's market, it will give Jyothy Labs access to the German company's expertise and brands.

Jyothy Labs promoters agreed to extend the March 2017 deadline, set under a 2011 deal, for Henkel, but the German firm would possibly want more say in the management, executives in the know said. But Jyothy Labs promoters are reluctant to give up the management control. Both sides held talks recently in Dubai, they told ET.