ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • MSME Summit
  • Trending News
    • Viral News
    • Travel
    • People
    • Entertainment
    • Sports
  • More ...
    • VIDEOS
    • PHOTOS
BREAKING NEWS
  • New Virus in China 2022: Langya ALERT! No vaccine, no treatment!
  • Policybazaar system vulnerabilities exposed customers' personal details, says this report
  • Government removes cap on airfares with effect from 31 August
  • Samsung Galaxy Z Fold 4, Galaxy Z Flip 4, Watch 5 series, Buds 2 Pro revealed - price, India availability, specs and more
  • Maruti Suzuki Alto K10 2022 bookings open; Check token amount and how to book online
Read in App
Business News » India News

Prabhat Dairy shares plunge 55% in 2 days! Fear rises in investors

Prabhat Dairy have approved sale of the company’s shareholding in its wholly-owned subsidiary Sunfresh Agro industries Private Limited (“SAIPL”) to Tirumala Milk Products Private Limited which is an Indian subsidiary of Groupe Lactalis. 

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Prabhat Dairy shares plunge 55% in 2 days! Fear rises in investors
Representational Image: Photo: Official Website

Prabhat Dairy share prices have plunged massively and thereby sent shock waves in the investor community. What was the reason for this? Investors seem to have lost faith in Prabhat Dairy after the company said it will sell 99% of its business to France’s Groupe Lactalis. The bloodbath in Prabhat Dairy is such that the company has lost over 55% of its market price and that too in just 2 days' time. The dramatic headlong plunge in Prabhat Dairy seems to be just a beginning as many fear the company's performance going forward may be affected. 

At around 12:13 hours, Prabhat Dairy stock price was trading at Rs 76.35 per piece down by 4.26% on BSE. However, the company has dropped by over 12% in today’s trading session after touching an intraday low of Rs 70.15 per piece. Reason behind this nosedive is Prabhat Dairy informing exchanges on January 21 that their board members have approved sale of the company’s shareholding in its wholly-owned subsidiary Sunfresh Agro industries Private Limited (“SAIPL”) to Tirumala Milk Products Private Limited which is an Indian subsidiary of Groupe Lactalis. 

Talking about Prabhat, Dhiraj Mistry and Ashit Desai  analysts at Emkay said, “Prabhat Dairy’s sale of the dairy business to Groupe Lactalis appears to be negative for minority shareholders, given the company’s exit from its main dairy business and its plans to use the cash proceeds from the transaction to invest in the expansion of its insignificant animal nutrition business.”  

Transaction value for sale of SAIPL is considered at Rs 1,227.18 crore. 

This was not it, Prabhat Dairy also plans to exit from its dairy business together with all specified tangible and intangible assets contracts, rights, personnel and employees, data and records, inventory and other assets and liabilities to Tirumala Dairy for a total consideration of Rs 472.81 crore. 

Taking into consideration both SAIPL stake sale and dairy business sale - the overall valuation for this merger would come around Rs 1,700 crore. 

When the news was announced, investors showed positive attitude towards Prabhat Dairy shares and it rocketted nearly 18% in early trading on  January 22 as it touched Rs 108.85 intraday high. However, this glory was only short lived, as a new buzz took a toll on investors and their positive sentiment on Prabhat Dairy evaporated. This buzz was concerning shareholders who will be selling their stake to the French company. 

Prabhat dairy is owned by Sarangdhar Nirmal and family. Together they have 50.1% holding and remaining is held by public shareholders. Meanwhile, in SAIPL, Prabhat’s stake stands at just 29.1% while remaining 71.1% is held by Cheese Land Agro. Hence, during the stake sale, as per reports Prabhat is seen receiving Rs 508.3 crore from total Rs 1,700 crore - which is 29.1% of its holding. 

Due to the buzz, within few hours of Tuesday’s trading session the gains turned into bitter losses, as by end of the day the stock of Prabhat finished lower by 27% to Rs 79.75 per piece on BSE. 

However, Prabhat clarified on the same day saying, “The Company will evaluate all potential options available to return capital to shareholders of the Company in the most optimal manner, subject to applicable laws and requisite approvals, after closing of the Transaction.” Looks like investors are not convinced even with this as they continue to beat Prabhat Dairy stock. 

With this, Prabhat Dairy share price has nosedived massively by over 55% in just two days.  

#BudgetKiBaat No 4: क्या होता है इनडायरेक्ट टैक्स (#IndirectTax)? एक मिनट में समझिए अनिल सिंघवी से।

#Budget2019 @AnilSinghviZEE pic.twitter.com/u4mLwPLQfo

— Zee Business (@ZeeBusiness) January 23, 2019

After this transaction, as per Emkay, Prabhat will be left with its insignificant animal nutrition and genetics business (1% of the FY18 sales) that has recently entered into a tied-up with DLG, a Denmark-based company.

The duo said, “Given the company’s exit from its core business (~99% of revenues), we are suspending our coverage on Prabhat Dairy.”

Post exit from dairy business, Prabhat intends to further develop its cattle feed business in various parts of the country, and expand into allied businesses such as animal nutrition and animal genetics.

Hence, an exit from business and the uncertainties engendered thereof, are the major causes of concern for Prabhat Dairy investors!

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Prabhat DairyPrabhat DAIRY share price
Written By: ZeeBiz WebTeam
Updated: Wed, Jan 23, 2019
01:16 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Stocks in Focus on January 23: Prabhat Dairy, Va Tech to Jet Airways; here are the 5 newsmakers of the day Stocks in Focus on January 23: Prabhat Dairy, Va Tech to Jet Airways; here are the 5 newsmakers of the day
Stocks in Focus on January 22: Prabhat Dairy, JP Associates to Dena Bank; here are the 5 newsmakers of the day Stocks in Focus on January 22: Prabhat Dairy, JP Associates to Dena Bank; here are the 5 newsmakers of the day

LATEST NEWS

8th Central Pay Commission News: Central government employees alert! Will there be 8th CPC? Searching for release date? Check latest development

How ad-tech startups are revolutionalising advertising landscape

Groupon layoffs 2022: Another US company starts job cuts as recession fears grow

Maruti Suzuki Alto K10 2022 bookings open; Check token amount and how to book online

Closing Bell: Sensex, Nifty50 conclude on mixed note – IT, FMCG, Realty drag market most

Raksha Bandhan 2022 correct date, best time; Rakhi Shubh Muhurat in India - Know inauspicious Bhadra, what to avoid as per Hindu calendar

Samsung Galaxy Z Fold 4, Galaxy Z Flip 4, Watch 5 series, Buds 2 Pro launched- price, India availability, specs and more

Bajaj Finance Fixed Deposit: Higher FD rates and quick online process - Details

Indian Air Force IAF AFCAT 02/2022 admit card, hall ticket released at afcat.cdac.in; Steps to download online and check exam dates

ITC Hotels unveils ITC Narmada - 12th property in Gujarat

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV