Board approves an increase in the limit of foreign institutional investment
The company’s shares rose as much as 2.5% after the announcement, before closing at Rs 92.15, down 0.32%, in Mumbai trading. / Photo: Mint
Chennai:
Apollo Tyres Ltd, India’s top tyre maker, will raise as much as Rs.800 crore by selling shares to institutional investors.
Shares rose as much as 2.5% after the announcement, before closing at Rs.92.15, down 0.32%, in Mumbai trading. The benchmark Sensex gained 0.33% to 18,823.91 points.
The company also got its board’s approval to increase the limit of foreign institutional investment to 40% from the existing 30%, it said in regulatory filings.
Since the firm raised the overseas investment limit, it might sell shares at Rs.90 each, according to Rajen Shah, chief investment officer at brokerage Angel Broking Ltd.
“This will help woo investors,” Shah said. “Also, things are going well for the tyre industry.”
The tyre industry is in a great position now as rubber prices have cooled and the replacement market is firm, Shah said. “We expect Apollo Tyre to clock a 15% increase in its topline (revenue) to Rs.12,000 crore in FY13.”
Other tyre manufacturers such as JK Tyre and Industries Ltd and Ceat Ltd are also likely to raise money through similar means, he said.
Company officials were not available for comment.
source: http://www.LiveMint.com / Home> Companies / by Arundhati Ramanathan / Monday, October 01st, 2012