JK Tyre shares rise on Rs 240-crore fundraising plan

Shares of JK Tyre & Industries edged up 1.3 percent on Tuesday after the company executed a subscription and policy rights agreement with International Finance Corporation (IFC) to raise Rs 240 crore through the issuance of 24,000 compulsorily convertible debentures (CCDs).

The CCDs will carry an interest rate of 6 percent per annum and will be issued on a private placement basis at a face value of Rs 1,00,000 each. The debentures will be convertible into equity shares of the company at Rs 180.50 apiece on or before the expiry of 18 months from the allotment date.

An extraordinary general meeting will be held on March 6 to seek shareholder approval for the transaction.

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In its third quarter report, the company reported a 24 percent on-year increase in net profit to Rs 67 crore, while consolidated total income rose 17 percent YoY to Rs 3,623 crore for the quarter against Rs 3,080 crore in the December 2021 quarter.

The tyre industry is expected to witness strong demand in the domestic market as a result of improved vehicle utilisation and thrust on infrastructural development, according to Raghupati Singhania, Chairman and Managing Director, JK Tyre.

On Monday, the company also announced the launch of two new sports utility vehicles SUV tyres ? Ranger HPe for electric cars, and Ranger X-AT tailormade for off-roaders ? and unveiled five new brand shops across cities in North India. The company now has 221 brand shops in the northern part of the country.

Also Read: JK Tyre rolls out tyres for SUV, EV aftermarket customers

JK Tyres have gained 36 percent in Market Capitalization over the last year while peers Goodyear and TVS Srichakra gained have 16 percent and 49 percent respectively.

As of 12:41pm, the company’s shares were trading at Rs 155.15 apiece, up 1.64 percent while Goodyear and TVS Srichakra were trading down 0.20 percent and 0.74 percent respectively.