Farmico International Makes Open Offer for Simandhar Impex

Farmico International Private Limited has launched an open offer to acquire up to 7,75,310 equity shares of Simandhar Impex Limited, representing 25.36% of its total capital, at Rs 30.00 per share.

Simandhar Impex Limited’s shares closed at Rs 30.00 following the announcement, matching the offer price. The offer price of Rs 30.00 per share is higher than the certified fair value of Rs 27.55. A Committee of Independent Directors has found the offer to be fair and reasonable. However, they also pointed to Simandhar Impex's negative profitability and the infrequent trading of its shares.

Simandhar Impex Limited is mainly involved in trading textiles and related products and is listed on the BSE. The acquirer, Farmico International Private Limited, was established in March 2019 and operates in wholesale trade.

The open offer could signal a shift in Simandhar Impex's control and strategic direction. Shareholders now have an opportunity to sell their shares at Rs 30 each. The premium offered above the fair value may encourage participation.

Simandhar Impex has reported consistent losses, with a net loss of ₹1.46 Cr in FY23 and ₹1.67 Cr in FY22. The infrequent trading of its shares presents a potential challenge for shareholders looking to exit their positions outside of the open offer.

In the textile trading sector, Mohit Industries Ltd. reported consolidated revenue of ₹392.60 Cr for FY23 and a net profit of ₹3.34 Cr, achieving a net profit margin of 0.85%.

Investors will monitor shareholders' decisions on tendering shares, the final holding pattern post-offer, and Simandhar Impex's future profitability under potential new influence. Any further announcements from Farmico International regarding the offer's progress will also be closely watched.