Allcargo Logistics share price rose in trade today after the firm said it has received Sebi's nod to buy a controlling stake in Hyderabad-based courier delivery services firm Gati. Allcargo Logistics share price rose 3.35% to Rs 114.10 compared to the previous close of Rs 110.40 on BSE.
The stock has been gaining for the last four days. It has gained 5.77% during last one year and risen 14.79% since the beginning of this year. The small cap stock hit its 52 week low of Rs 87.35 on September 4, 2019 and 52 week high of Rs 126 on March 14, 2019.
On Wednesday, SEBI cleared Allcargo's open offer to buy approximately 3.17 crore shares or 26% stake in Gati at Rs 75 a share. This will mark the completion of the acquisition process which was initiated on December 5, 2019. "On full acceptance of the open offer it will take Allcargo's stake in Gati to 46.83%," Mumbai-based logistics solutions provider said in a filing to the Bombay Stock Exchange.
The open offer is expected to be launched in March 2020 and closed by April 2020, Allcargo said. Allcargo has already deposited Rs 238 crore - equivalent to 100 per cent of the capital required to fund the open offer - into an escrow account set up as per SEBI norms for the open offer transaction. Preferential allotment and part purchase of promoter shares has also been completed by Allcargo in January 2020.
As part of this process, two directors of Allcargo have been appointed on the Gati Board. In December last year, Allcargo said it would buy up to 1.03 crore equity shares, representing 8.51% stake at Rs 75 per share from some of the existing members of the Promoter and Promoter Group of Gati - Mahendra Kumar Agarwal, Mahendra Investment Advisors and TCI Finance (TCI), and Gati.
Allcargo would also subscribe to a preferential issue of 1.33 crore equity shares, representing 10.92% stake of Gati at Rs 75 per share, subject to the approval of the shareholders of Gati. Consequent allotment as per the two agreements, Allcargo will own a 19.43% of expanded voting share capital in Gati.
By Aseem Thapliyal