Rajesh Exports shares rise 14 % on stake sale buzz
Shares of Rajesh Exports were buzzing with action Monday on reports of a US-based buyout fund and diamond industry giant De Beers eyeing 51 per cent stake in the jewellery maker.
By INDIATIMES NEWS NETWORK |
MUMBAI: Shares of Rajesh Exports were buzzing with action Monday on reports of a US-based buyout fund and diamond industry giant De Beers eyeing 51 per cent stake in the jewellery maker.
The suitors are yet to make a formal bid, but both the parties are expected to make a bid for control stake.
At 10:25 am, the stock was up nearly 14 per cent at Rs 831. The stock touched a high of Rs 849.95 and low of Rs 735 in trade so far with volume of 3,52,487 against two-week average of 83,007 shares.
The share gained 22 per cent last week. If the acquisition goes through, it will also trigger a mandatory open offer for an additional 20 per cent.
The Bangalore-based Rajesh Exports shot into limelight in 2004 when its revenues jumped more than 13 times in a single year to about Rs 3,000 crore. Market capitalisation too shot up from just about Rs 43 crore in 2002-03 (Apr-Mar) to Rs 2,650 crore now.
A reason for rising valuations of the company is linked to the forward integration in the jewellery business. Traditionally, the company has been a wholesale gold jewellery maker and exporter, which is a low-margin business.
While exports continue to comprise a substantial part of the revenues, the company has also recently moved into the front end with its jewellery retailing business. It has opened a chain of 30 stores under the ‘Laabh’ brand in the metros.
In addition, the company is in the process of unveiling a jewellery chain under the ‘Shubh’ brand, which would be located in smaller cities and towns.
The suitors are yet to make a formal bid, but both the parties are expected to make a bid for control stake.
At 10:25 am, the stock was up nearly 14 per cent at Rs 831. The stock touched a high of Rs 849.95 and low of Rs 735 in trade so far with volume of 3,52,487 against two-week average of 83,007 shares.
The share gained 22 per cent last week. If the acquisition goes through, it will also trigger a mandatory open offer for an additional 20 per cent.
The Bangalore-based Rajesh Exports shot into limelight in 2004 when its revenues jumped more than 13 times in a single year to about Rs 3,000 crore. Market capitalisation too shot up from just about Rs 43 crore in 2002-03 (Apr-Mar) to Rs 2,650 crore now.
A reason for rising valuations of the company is linked to the forward integration in the jewellery business. Traditionally, the company has been a wholesale gold jewellery maker and exporter, which is a low-margin business.
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While exports continue to comprise a substantial part of the revenues, the company has also recently moved into the front end with its jewellery retailing business. It has opened a chain of 30 stores under the ‘Laabh’ brand in the metros.
In addition, the company is in the process of unveiling a jewellery chain under the ‘Shubh’ brand, which would be located in smaller cities and towns.
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