This stock surges 16% in 2 sessions; hits all-time high
Shares of Sunflag Iron & Steel Company continued gaining streak for the second straight session on Monday, in an otherwise volatile broader market, amid surge in volume trade. The smallcap stock rallied as much as 16% in two trading sessions to hit a fresh all-time high in intraday trade after the iron and steel manufacturer acquired nearly 12% stake in Lloyds Metals and Energy Limited (LMEL), operating in the business of manufacturing of sponge iron, power generation, and mining activities.
Extending its gaining momentum, Sunflag Iron & Steel share price opened 2.7% higher at ₹153.85 against the previous closing price of ₹149.80 on the BSE. During the session, the stock gained as much as 8.7% to hit a record high of ₹162.55, breaching its previous high of ₹150.95, touched on February 20, 2023. It touched a 52-week low of ₹62.10 on April 1, 2022.
At 2:00 PM, the stock was trading 7.4% higher at ₹160.1, with 5.6 lakh shares changing hands over the counter compared with the two-week average volume of 0.71 lakh stocks. The market capitalisation stood at ₹2,883.5 crore. In comparison, the BSE Sensex was at 57,153 levels, down 836 points, or 1.44%.
Sunflag Iron & Steel shares have given a solid return of 121% in the last one year, while it jumped 75% in a six-month period. In the last one month, the stock has risen 11%, while it gained 13% in a week. In the calendar year 2023, the counter has added 27%.
The Sunflag group company in an exchange filing on Thursday said it acquired shares in Lloyds Metals and Energy post conversation of Optionally Fully Convertible Debentures (OFDCs). The company was allotted 6 crore 0% OFDCs by LMEL vide their board resolution dated June 15, 2022. The cost of acquisition of the shares was ₹204.35 apiece.
“As per the terms of the issuance and allotment of the said OFCDs, they were due for conversion after 9 months but before 18 months from the date of allotment and hence, they were due for conversion after 14th March, 2023 but before 14th December, 2023,” it said in a BSE filing.
The company exercised its option of conversion of OFCDs issued and allotted by LMEL into 6 crore equity shares of face value of ₹1 i.e., conversion ratio of 1:1. The same was approved by LMEL’s board on March 16, 2023.
Incorporated in 1984, Sunflag Iron & Steel manufactures alloy steel and special steel products, mainly for the automobile sector. The plant in Bhandara (Maharashtra) has a capacity of 400,000 tonnes of rolled products per annum. It also has two direct reduction plants with a combined capacity of over 2.6 lakh tonne per annum and a captive power plant with a capacity of 37 megawatt.