Paramount above 6% on AEI Cables buy

MUMBAI: Paramount Communications soared over 6 per cent Tuesday after the company's announced the acquisition of AEI Cables in an all cash deal. AEI Cables has a turnover of Rs 533 crore.

At 11:21 AM, the share was up 6.43 per cent at Rs 35.60 with volume traded at 17,67,584 against two-week average of 1196870 shares.

The company's share has been zooming ahead ever since reports of the acquisition. Over the past one week, the share has gained nearly 32 per cent.

"Paramount Communications offers a high growth opportunity at extremely high valuations. We recommend investors to buy the stock with a target of Rs 39 in 12-15 months," Anagram Stock Broking said in a report.

AEI Cables is a leading manufacturer of cables solutions and is a wholly owned subsidiary of the international electronic sensors and components group TT Electronics Plc.

The acquisition of AEI Cables will make Paramount the largest listed Indian company in the cable industry with an annual turnover of over Rs 1,100 crore.

The buy will strengthen the consolidated balance sheet of the company and is accretive to the net worth by about Rs 110 crore, Paramount Communications said in a notice to BSE.

The acquisition will be funded through borrowings by the company's new wholly-owned UK subsidiary against the AEI Cables assets.