Paramount Communications shares rebound 5% as board approved acquisition plans

Shares of Paramount Communications Ltd rebound 5 per cent from the early cuts on Thursday as its board of directors, in their meeting held today, approved the acquisition of Valens Technologies Private Limited from its existing shareholders. The board was scheduled to meet today.

Paramount will hold 100 per cent stake in the company after acquisition of 1,93,996 equity shares from the promoters of the company. As a result, Valens Technologies will become a wholly owned subsidiary of Paramount Communications, it said in the exchange filing.

Valens Technologies, which has a pan India presence, is in the business of manufacturing HDPE pipes used in telecom network business and water pipeline business. The transaction is likely to be completed by August 31, 2023.
 

Following the announcement, shares of Paramount Communications recouped 5 per cent to Rs 56.6 from Rs 54 on Thursday, with a total market capitalization close to Rs 1,275 crore. The stock had settled at Rs 55.16 on Wednesday.

The acquisition is done in a cash consideration at a price of Rs 102 per equity share, amounting to Rs 1.97 crore. Valens Technologies had a turnover of more than Rs 28.07 crore. for the financial year ended March 31, 2023, the filing added further.

Shares of Paramount Communications have delivered multibagger returns to the investors from its 52-week low at Rs 13.65. The stock has surged about 315 per cent from these levels. The stock is up 50 per cent in the current month.

For the quarter ended on June 30, 2023, Paramount Communications reported a 107 per cent rise in the net profit at Rs 14.5 crore, compared to Rs 7.03 crore in the year ago period. Revenue from operations jumped 29 per cent to Rs 210.54 crore in Q1FY24 from Rs 163.73 crore in the previous year. EBITDA came in at Rs 18.51 crore, up 77 per cent on a year-on-year basis.
 

Paramount Communications is part of the Paramount group of companies, is one of India's leading wire and cable manufacturing companies. Over six decades of operations, the group has widened its portfolio, building on a prestigious clientèle that includes government, institutional and major private sectors.

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