Marketmen have been enthused by news that MICO's parent, Robert Bosch GmbH of Germany, has received FIPB approval to hike its stake in the Indian arm. The stock of the Bangalore-based auto ancillary company hit the upper-end of the circuit-filter at Rs 3994, up Rs 295 from Monday's close. According to sources, the parent plans to hike its stake through a buyback offer. MICO plans to buyback 200,000 equity shares at Rs 4,200 per share. However, the buyback will add to the illiquidity; the low floating stock is already a problem at the MICO counter. MICO makes auto components like spark plugs, fuel injection pumps, starter motors, ignition coils and other related products. The company enjoys an 80 per cent market share in the fuel injection pump sector and an 85 per cent share in the spark plugs industry.

Spic spurts despite fall in net profit

Notwithstanding the poor showing for fiscal 1999, Spic has gained 14.13 per cent in the past seven trading sessionson the Mumbai Stock Exchange. The market has ignored the 35.61 per cent dip net profit and has responded to the positive news of Spic signing a memorandum of understanding with public sector Madras Refineries Ltd. The market has also taken note of a 25 per cent dividend announced by the company which gives an yield of 9.38 per cent on the current market price of Rs 26.65. During fiscal 1998-99, there was a temporary suspension of activities in view of a pending litigation. The company is in the process of settling the matter out of court.

The ammonia/urea plants at Tuticorn were shut down from May 20, 1998, to July 18, 1998, and this affected production. As a result, sales showed a lower growth of 15 per cent to RS 2381.46 crore. While interest spurted by 34 per cent to Rs 159.81 crore, net profit dipped by 36 per cent to Rs 50.84 crore. On an equity base of Rs 88.05 crore, the EPS works out to Rs 5.77. This discounts the current market price by an attractive multiple of 4.61.

-- Nandita Datta &Jai Kumar NR