Shares of Allcargo Logistics Ltd. and Allcargo Gati Ltd. rose on Friday after their boards approved plans to demerge its supply chain unit and restructure the logistics business, in addition to plans to raise up to Rs 500 crore.
The boards of Allcargo Gati and Allcargo Logistics approved the scheme for demerger of its international supply chain into a separate entity called Allcargo ECU Ltd., an exchange filing said on Thursday.
The demerged business will include the Indian business, along with the international subsidiaries that come under the ECU Worldwide NV. The express business and contract logistics business will become a part of the resulting Allcargo Logistics.
All shareholders of Allcargo Gati will get 63 shares in the resulting Allcargo Logistics for every 10 shares held in the company. The Allcargo Logistics shareholders will get 1:1 shares in the demerged Allcargo ECU, in addition to the current shares in the company.
Allcargo Gati board also approved the proposal to raise Rs 500 crore to meet capex and working capital requirements.
Allcargo Logistics shares rise nearly 11%
Allcargo Logistics stock jumped 10.55%, the highest in more than four months, before paring gains to trade 7.58% higher at 9:56 a.m. This compares to a 0.38% advance in the NSE Nifty 50.
It has risen 24.91% year-to-date. Total traded volume so far in the day stood at 2.7 times its 30-day average. The relative strength index was at 69.
Of the five analysts tracking the company, three maintain a 'buy' rating, one recommends a 'hold,' and one suggests 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 26.7%.
Allcargo Gati shares rise nearly 8%
Shares of Allcargo Gati advanced 7.97%, the highest in over one month, before paring gains to trade 1.41% higher at 9:56 a.m. This compares to a 0.38% advance in the NSE Nifty 50.
The stock has fallen 2.95% year-to-date. Total traded volume so far in the day stood at 9.8 times its 30-day average. The relative strength index was at 52.
All three analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month consensus price target implies an upside of 2.3%.
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