Amtek Auto shares jump 24% on co's debt cut plans; zoom 104% in 6 sessions

Shares of the crisis-hit auto component company Amtek Auto maintained strong buoyancy for the second straight session, zooming 24 percent in early Monday trade following a media report that the company plans to monetise its non-core assets for reducing its overall debt. At 10.40 am, shares of Amtek Auto traded at Rs 54.60, up nearly 17 percent from previous close of Rs 46.70. Over 65 lakh shares changed hands on the BSE so far. [caption id=“attachment_2432610” align=“alignleft” width=“380”]  Reuters[/caption] From its 52-week low of Rs 25.60 touched in the first week of this month, the stock has so far vaulted a whopping 104 percent till date on hopes of a strong revival plan from the company after investors run riot in a selling frenzy that led to a carnage in the counter since mid August. In an interview that appeared in The Economic Times, the company’s chairman Arvind Dham charted out a revival plan and said the company will soon undertake plans to sell most of its non-core assets and intend to repay Rs 7,000 crore debt in next 15 months time. Currently, the consolidated debt of the group stands at Rs 17,500 crore and would look to bring it down to Rs 10,000 crore in the next one year, it said. As per the news, the value of Amtek’s non-core assets is worth $2 billion, of which it will hive-off $600 million and sell $400 million worth of assets. The stock began to correct from 17 August and lost 69 percent in next seven sessions, as equity market investors worried over the company’s sagging business fortunes and huge debt coupled with reports of its two debt schemes facing default prospects triggered wide-spread selling pressure. With the company’s contracts in equity derivatives set to be excluded from futures and options (F&O) segments with effect from October 30, Amtek Auto stock has faced relentless selling pressure since the outbreak of the company’s financial woes. Despite some clarification coming in from the company’s management and with overall market sentiment remaining sluggish to negative bias, stock investors will exercise caution before deciding on the stock going ahead.