McNally Bharat is locked currently on the 20% upper circuit at Rs.94.90. Yesterday, the stock had closed at Rs.79.10. Volumes were up over 17 times.

This sudden, overnight, spike up in the stock price is after the company announced that it has entered into an agreement with EMC Ltd and Williamson Magor Group to enable an additional equity investment of upto Rs 100 crore as primary equity capital into McNally And based on this, McNally will allot 10 million shares to EMC at a price of Rs 100 per share on a preferential basis.

Post this preferential offer, EMC will hold 29.64% stake in the company and that means as per SEBI guidelines, EMC and the Willaimson Magor group will have to make an open offer to buy 26% stake in McNally.

Accordingly, the open offer has also been made along with announcement, the open offer to the shareholders of McNally has been made at a price of Rs.100/share and that explains the stock price hitting the 20% upper circuit.