Prabhat Dairy hits upper circuit despite promoter pledge

Food processing firm Prabhat Dairy was locked in 5 per cent upper circuit on Monday despite the fact that the company's promoter entered an additional pledge on 9.23 per cent shareholding on March 13.

Prabhat Dairy promoters had pledged 2.02 crore shares or 41 .45 per cent of their 50.1 per cent shareholding in the company. The company had announced in January its plans to divest its flagship dairy business to French multinational Groupe Lactalis for a consideration of Rs. 1,700 crore. The transaction would involve the sale of the dairy business of the company by way of slump sale on a going concern basis. The deal would also involve the sale of 100 per cent shareholding in Sunfresh Agro Industries, a wholly-owned subsidiary of Prabhat Dairy.

The amount at which the dairy business is being sold is significantly higher than the company’s current market cap of Rs. 673 crore.

On Monday, Prabhat Dairy was trading at Rs. 68.95 per share, up by 5 per cent on the BSE. The stock made an intraday high/low of Rs. 190 per share and Rs. 47.5, respectively.