NEW DELHI, Mar 9: The unprecedented rise in trading volumes in Garware Polyester on Monday on the Bombay Stock Exchange could leave many people guessing. As many as 25.65 lakh shares were traded on BSE on the day, with the share price spurting by nearly 18 per cent to Rs 18.15. The trading volume recorded on the BSE was equal to about 14 per cent of the total equity of the company. It has a paid-up capital of Rs 17 crore.The number of trades were 411 on the exchange and the total turnover was Rs 4.3 crore. In terms of number of shares traded, Garware Polyester ranked number three after Reliance and ITC on BSE.
Besides, Monday's trading volume was the largest in the last 10 years on the BSE. Garware Polyester is one of the many Group A shares whose price hit a 10-year low recently. The company's share price had dropped to as low as Rs 15, bringing down the market capitalisation to Rs 25 crore.
While the recovery can be partly explained to the overall spurt in the Sensex, it is difficult to trace theunprecedented rise in volumes to the general mood, a broker said.
The spurt in the counter could not be attributed to the results either, as the company's first-half results ending June, 1997 saw the net profit falling to Rs 1.33 crore from Rs 6 crore in the corresponding period in the previous year. A huge interest burden of Rs 23.57 crore had dragged the profit down. Since the company is going in for a Rs 400-crore expansion programme, analysts point out that its interest burden may not fall substantially in the near future.
On an equity base of Rs 17 crore, Garware Polyester is sitting pretty on huge reserves of approximately Rs 220 crore.
The company is planning to expand its polyester manufacturing capacity from 40,000 tonnes per annum to one lakh tonnes per annum.
Roughly 70 per cent of its production would be earmarked for exports. The expansion will take place in two phases over five years.
