As it battles its way out of a mammoth debt by selling assets, Delhi-based auto component maker Amtek Auto has caught the fancy of foreign portfolio investors (FPIs). The FPIs have almost doubled their stake in the company to 9.17 per cent in the quarter ended June 30, against 4.77 per cent as on March 31.
The impact of FPIs' increased interest in the company is also reflected in the rally seen in Amtek’s stock price. Over the past month, the stock has gained 50 per cent. On Tuesday, the scrip hit an intra-day high of Rs 56.20 and closed at Rs 51.60 on the BSE, up 7.50 per cent over the previous close. This, even as the company’s efforts to pare debt have not materialised. The consolidated debt of the group is estimated to be about Rs 14,700 crore, most of which is in the flagship company Amtek Auto.
A company official said it cannot comment on the changes in the public shareholding of the firm. The increase happened, even as May and June marked an outflow of Rs 4,373 crore by the FPIs.
Amtek had said last month that it was close to selling its profitable German unit, Tekfor, to an overseas buyer to reduce its debt. The sale could fetch $700 million to the company. The group also plans to sell 50 per cent stake in a joint venture unit and a domestic food business, as well as raise funds from three foreign investors. It claims that after these deals are done, the company’s debt will come down by $1 billion in the next 12 months.
Grant Thornton and EY are the advisors to the sale of non-core assets in domestic businesses, under which a food business will be also sold. Carnation Hospitality, owned by group company Rollatainers, operates coffee chains under the Barista brand in the country. It also operates restaurants such as Kylin, some burger outlets under Wendy’s (an American brand) and a food supplier business.
Sources: Capitaline, Bloomberg