The Board of Directors have approved Slump Sale Transaction of the Electronics Division of the Company subject to the approval of the shareholders.
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Awaiting price reaction for this filing.
Keerthi Industries' board has approved the slump sale of its Electronics Division, which makes Printed Circuit Boards (PCBs), to Hyderabad Bottling Co Pvt Ltd for INR 36 Crore (payable in installments). The Electronics Business contributed INR 24.29 Crore, about 19.87% of the company's total income of INR 122.23 Crore in FY25, with net worth of INR 40.73 Crore. The proceeds will be used to repay INR 29.11 Crore of term loans and cash credit facilities and INR 26.54 Crore of unsecured loans, potentially saving around INR 3.6 Crore in annual interest costs. The transaction is classified as a related-party deal (both parties share joint control) and is being done at arm's length based on an independent valuation. It requires shareholder approval via postal ballot and is expected to be completed by end of Q2 FY25-26, with no change in shareholding pattern.
For shareholders, the deal reduces debt significantly and improves profitability, but the buyer is a related party and the electronics unit (~20% of revenue) is being sold below its proportional contribution to the company's net worth. The stock may see short-term re-rating on deleveraging, though long-term impact depends on how the freed-up capital is deployed in the core cement business.