Deepak Fertilisers shares gain 6% after demerger announcement

Shares of Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL) jumped nearly 6 per cent in Friday trade after announcing the demerger of its composite businesses. The stock surged 5.98 per cent to hit a day high of Rs 861 over its previous close of Rs 812.40 on BSE. A total of 1.10 lakh shares changed hands today, amounting to a turnover of Rs 9.30 crore. The market capitalisation or m-cap of the company stood at Rs 10,766.19 crore.

At today's high level of Rs 817.10, Deepak Fertilisers traded 18.90 per cent lower from its 52-week high of Rs 1,061.70, hit on October 21 this year. That said, the stock zoomed 141.96 per cent from its one-year low of Rs 355.85, touched on December 20, 2021.

Deepak Fertilisers has gained 7.31 per in the last five sessions. On a year-to-date (YTD) basis, the scrip has ascended by 110.07 per cent.

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The Board of Directors of Smartchem Technologies, wholly-owned subsidiary of Deepak Fertilisers, has approved a corporate restructuring plan with the objective of unlocking growth potential of each of the businesses.

In an exchange filing, the company said, it has approved the 'Composite Scheme of Arrangement' that is demerger of the TAN Business (Mining Chemicals) from STL to Deepak Mining Services Pvt Ltd (DMSPL), a wholly owned subsidiary of Deepak Fertilisers; and amalgamation of Mahadhan Farm Technologies Pvt Ltd (MFTPL), being a wholly owned subsidiary of STL, with STL.

"This draft Scheme of demerger is subject to customary, statutory, and regulatory approvals including approvals of respective shareholders and creditors, NCLT and all other regulators as may be required," the industrial chemicals and fertilisers manufacturer added.

Sailesh C Mehta, Chairman and Managing Director of Deepak Fertilisers, said: "Over the past few years, the group has significantly improved its operational performance, generated cash flows and strengthened balance-sheet whilst focusing on increasing investments in greenfield expansions. The proposed corporate restructuring shall considerably help create strong independent business platforms within the larger DFPCL brand umbrella, hence enhancing stakeholders' value over time."

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On the earnings front, the company's net profit jumped 195 per cent to Rs 276 crore in the second quarter (Q2) that ended on September 30, 2022 as against Rs 93 crore posted in the same period last year. The operating revenue grew by 51.7 per cent to Rs 2,719 crore.

Meanwhile, Indian equity benchmarks traded lower in today's deals amid weak global cues.