Kalpataru Power, JMC hit 52-week highs on fixing record date for merger

Shares of Kalpataru Power Transmission (KPTL) and JMC Projects (JMC) hit their respective 52-week highs on the BSE in Monday’s intra-day trade after fixing January 11, as record date for the merger.

KPTL and JMC mutually fixed Wednesday, January 11, 2023 as the record date for the purpose of determining the shareholders of JMC to whom the equity shares of KPTL would be allotted, pursuant to the amalgamation scheme.

Shares of KPTL rallied 6 per cent to Rs 591.10, while JMC surged 7 per cent to Rs 146.30 on the BSE in intra-day trade today. At 10:06 AM; these stocks traded higher in the range of 2 per cent and 3 per cent. In comparison, the S&P BSE Sensex was up 0.35 per cent at 61,052.

KPTL is one of the largest specialized EPC companies engaged in power transmission & distribution, oil & gas pipeline, railways and civil infrastructure business. JMC, a subsidiary of KPTL, is one of the leading civil construction and infrastructure EPC Company. JMC has emerged market leader in the verticals of Buildings & Factories (B&F), Water, Urban Infrastructure and Heavy Civil.

The board of directors of these companies at their respective board meeting held on February 19, 2022 approved the scheme of amalgamation which inter alia provides for the merger of JMC with KPTL. This merger brings together two leading organizations with unique sets of capabilities and complementary businesses in the current attractive EPC markets. The merger will accelerate growth and enhance value creation for all stakeholders, these companies said.

Pursuant to the Scheme, JMC’s shareholders (other than KPTL) will be allotted one share of KPTL against every four shares held by them in JMC.

The combined entity (post-merger) will possess a sectorally diversified portfolio of engineering and heavy construction capabilities, thereby creating one of the largest EPC companies in India with an estimated order book visibility (including L1) in excess of Rs 37,000 crore. This entity will be present across all high growth sectors, with significant capital allocation across Government spend in the year(s) to come, the company said.

The merger of JMC with KPTL will significantly enhance group market position. The management said the group will continue to prioritize divestment and restructuring of non-core businesses & assets. Looking ahead, the management expects strong revenue growth, stable EBITDA margins and reduction in net debt in FY2023.