IFB Industries in the green

IFB Industries, which had closed yesterday at Rs.614.90, opened slightly higher at Rs.618.30 but soon galloping away to a new high at Rs.669. It continues to remain over Rs.656 levels, up some 7%.

The company had a good news to announce on Monday evening but the markets did not react to this yesterday; instead we see a ‘late reaction’ today! Obviously bargain hunters are on the prowl.

The market is enthused with the news that it plans to acquire the 100% stake of Global Automotive & Appliances Pte Ltd ( GAAL) , Singapore from IFB Automotive Pvt. Ltd. ( a promoter group company ).

This is being bought at a consideration of Rs 20 crore, paid by way of bank transfer. The good part of this news is that GAAL has a step down subsidiary in Thailand viz. Thai Automotive & Appliances Limited ( TAAL), engaged in fine blanking business. The acquisition is in same field of business and will help in market entry in South East Asia.

The transaction is expected to be completed within first quarter of FY 2017-18 thus we could see positive effects of integration happening from Q2 onwards.