Shares of Hindustan Motors were locked at 5 per cent upper circuit at Rs 17.35 on the BSE on Thursday, on the back of heavy volumes. Till 10:15 am; around 11.68 million equity shares, representing 5.6 per cent of total equity, had changed hands on the NSE and BSE.
The stock traded close to its 52-week high of Rs 18.20 that it had touched on October 19, 2021. It also traded at its highest level since August 2011. In the past three weeks, the stock has zoomed 77 per cent from Rs 9.83 on May 12, 2022. In comparison, the S&P BSE Sensex was up nearly 5 per cent during the same period. Earlier, the stock had hit a record high of Rs 111 on April 8, 1992.
Meanwhile, the exchanges sought clarification from Hindustan Motors on May 30, 2022 with reference to significant movement in price, in order to ensure and safeguard investors on latest relevant information about the company. The reply is awaited.
That apart, the company was compelled to declare ‘suspension of work’ at its Uttarpara Plant on May 24,2014 due to low productivity, growing indiscipline, shortage of funds and lack of demand for products.
In its FY21 annual report, the company had said that it aimed to revive operations and had started process of rationalising cost post suspension of work at Uttarpara plant. Also, the company has been engaged in scouting tie-ups with potential investors or strategic partners who can introduce newer product portfolios in the market and infuse capital into the company. Besides that, the company is considering various measures including alternative use of fixed assets to generate revenue.
“The suspension of work at Uttarpara Plant and lay off at Pithampur Plant are continuing as it is unviable to operate the two plants under present business conditions. The company is also in the process of selling identified assets subject to necessary approvals to improve net worth as well as immediate cash generation to meet its financial obligations,” the company said.
That said, Hindustan Motors is likely in talks with an European auto company focused on the electric vehicle (EV) space for a joint venture. A memorandum of understanding (MoU) has been signed and due diligence is expected to start shortly and will take 2-3 months to conclude, according to a Business Standard report. CLICK HERE FOR FULL REPORT
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