The promoters of auto component-maker Amtek Auto Ltd, backed by investors like Warburg Pincus and ChrysCapital, are infusing Rs 302.40 crore in the company through warrants conversion. This deal would further consolidate the shareholding of the promoter group in Amtek Auto as the Arvind Dham-led auto component group has been restructuring its public holdings.
The shares were allotted to the promoter group at Rs 180 per unit, a premium to today's closing price of Amtek Auto. The share price of Amtek Auto closed on Monday at Rs 159.85, marginally down 0.09 per cent.
With this warrant conversion, the promoter group shareholding in Amtek Auto will go up to 37.44 per cent from 32.58 per cent as of March 31, 2011.
The investment in Amtek Auto comes soon after the firm redeemed its convertible bonds which were due for maturity this month, for Rs 662 crore ($145.97 million).
Last year, Amtek Auto had acquired 40 per cent stake held by the promoters in Amtek India, for up to Rs 340 crore. Subsequently, it made an open offer for Amtek India, along with its promoter group, and had increased its holding in the company to 61.64 per cent in the company.
So the promoters have sold their direct holding in Amtek India and used the money to increase stake in the flagship firm.
While private equity major ChrysCapital holds 8 per cent stake in Amtek Auto through Warhol Ltd, Warburg Pincus held another 5.58 per cent as of March 2011. Both these funds' stake will get diluted marginally after the warrant conversion by the promoters.
For the quarter ended March 31, 2011, Amtek Auto reported 30 per cent increase in consolidated net profit – Rs 110 crore from Rs 85.23 crore a year ago. The firm’s total sales for the quarter also increased by more than 27 per cent –from Rs 920 crore to Rs 1,170 crore.