Sunflag Iron up 15% in two days on acquiring 11.89% stake in Lloyds Metals
Shares of Sunflag Iron & Steel hit a new high of Rs 160.85 as they surged 7 per cent on the BSE in Monday’s intra-day trade amid heavy volumes. The stock surpassed its previous high of Rs 150.95, touched on February 20, 2023.
At 09:52 AM; the stock was trading 6.5 per cent higher at Rs 159.60, as compared to 0.85 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped over three-fold. A combined 2.5 million shares changed hands on the NSE and BSE.
In past two trading days, the stock of iron & steel products company has rallied 14 per cent after acquisition of over 10 per cent stake in Lloyds Metals and Energy Limited (LMEL) post conversation of Optionally Fully Convertible Debentures (OFDC’s).
Sunflag Iron said the company has exercised its option of conversion of 60 million 0% OFCD’s issued and allotted by LMEL into 60 million equity shares of face value of Re 1/- i.e., conversion ratio of 1:1.
LMEL in its board Meeting held on Thursday, March 16, 2023 converted and allotted the said 0 per cent 60 million OFCD’s in to 60 million equity shares, representing 11.89 per cent in the total voting equity share capital of LMEL, the company said.
Sunflag Iron & Steel is engaged in manufacturing of mild-steel and alloy steel products of varieties like carbon steel, free & semi free cutting steels, micro-alloyed steel, stainless steel, spring steels, valve steel, bearing steels, quality steels, tool steel etc.
The product range of the company includes Rolled products, Billet/Bloom, Ingots, and Bright Bars etc. of varied shape and size range. These products are mainly used for manufacturing Automotive Transmission Gears, Drive Shafts, Steering System, Bearings, Exhaust System and other Engine Components.
The company also supplies to Indian Railways, Ordnance Factories, Power Sectors & other General Engineering areas for manufacture of critical application components.
Meanwhile, the government has signed agreements with 27 companies , kick starting the Rs 6,322 crore production linked incentive (PLI) scheme for specialty steel, which is expected to attract investments upto Rs 30,000 crore over the next five years. In all, memorandum of understanding (MoUs) were signed for 57 applications from 27 companies.
Multiple smaller secondary steelmakers have also qualified for the scheme. Some examples of specialty steel includes alloy steel, coated and plated steel, electric steel, high strength steel and wear resistant steel. The government is also planning to introduce the second edition of the PLI scheme for specialty steel to boost production of value added steel in the country, which augurs well for domestic steel players, ICICI Securities said in a note.