PCBL shares surge 7%; hit 52-week high on plans to acquire Aquapharm Chemicals

Shares of PCBL Ltd surged as much as 6.7% on Wednesday to hit a 52-week high of ₹271.50 apiece on the BSE, a day after the chemical manufacturer unvailed its plans to acquire Aquapharm Chemicals for ₹3,800 crore. Through this acquisition, the country's largest carbon black manufacturer plans to foray into global speciality segments of water treatment chemicals and oil & gas chemicals. 

The scrip opened higher at ₹261.95 apiece on the BSE, up 3%, as against the previous closing price of ₹254.30. At 1:45 pm, the share price of the chemical major was trading 6.61% higher at ₹271.10. The company’s market capitalisation stood at ₹10,174 crore with more than 5.39 lakh shares exchanging hands on the BSE as against the two-week average of 3.29 lakh shares. The company hit a 52-week low of ₹108.05, which the company touched on March 29 this year.

"The Board of Directors of PCBL Limited, has at the meeting held on 28 November 2023, in-principle approved the acquisition, directly or through one of its affiliates, of 212,172 shares of Aquapharm Chemicals Private Limited ("ACPL"), for an aggregate consideration of ₹3,800 crores (subject to agreed adjustments) representing 100% of the issued and paid-up share capital (on a fully diluted basis) of ACPL ("Proposed Transaction")," the company says in a statement.

"The Company has executed a share purchase agreement dated 28 November 2023 ("SPA") with ACPL, Mr. Vimal V. Mangwani, Mr. Dharmesh Mangwani, Mr. Nitin Raojibhai Desai and other shareholders of ACPL, for undertaking the Proposed Transaction," it adds.  

The transaction is subject to regulatory approval from the competition commission of India, says the company.

The Pune-based ACPL specialises in the manufacturing of water treatment chemicals with key products like phosphonates, biodegradable chelating agents, polymers, and biocides, amongst others with applications in water treatment, detergents, industrial cleaners, oil fields, municipal water treatment, pulp and paper, water softening, surface cleaning, pharma, agrochem applications. ACPL has manufacturing facilities in India, the United States, Saudi Arabia.

In the July to September quarter of FY24, the company’s profit stood at ₹122.60 crore, up 5.3%, as against ₹116 crore in the same period last year. The company’s revenue from operations, however, declined by 8.7% to ₹1,486.70 crore in the quarter ended September as against ₹1,627.8 crore in the corresponding period of the previous year owing to a weak demand.

The company's operating margin expanded to 16% in the September quarter as against 11.6% in the same period last year owing to a decline in input costs of the raw materials.