Indo Gulf Fertilisers surged on the bourses in early trades today after the A V Birla group made an open offer for 20% stake in the company at a price of Rs 75 per share.

The scrip of Indo Gulf Fertilisers (IGFL) leaped up 15.9% to Rs 68.45 on NSE in just about an hour of trading. On Monday, it had closed at Rs 59.05. Around 4.8 lakh IGFL shares changed hands on NSE thus far.

The stock has been on a sustained rise on the bourses ever since the restructured IGFL was listed on 31 March 2003. In fact, just on Monday (23 June 2003), the stock witnessed a sharp surge in trading volumes, at 7 lakh shares on NSE. This happens  to be the highest daily volume recorded in the stock from the day the restructured IGFL was listed on the bourse. Over the 58 trading sessions to Friday 20 June 2003 (since listing), average daily volumes were around 1.08 lakh shares.

On Monday, volumes were also commendable, at 5.9 lakh shares, on BSE. Average daily volumes have been around 1.09 lakh shares on BSE since listing.

It seems that the market may have got wind of the forthcoming open offer on Monday itself. The stock exchanges and Sebi may now move to probe the matter.

IGFL has been moving strong since its listing (listing price Rs 31.05) on 31 March 2003. It surged 93.3% to a high of Rs 60.05 on 5 June 2003. Over the next few days, the stock hovered in a band of Rs 55-59.

Today's surge in the stock comes after the A V Birla group made a public announcement for acquiring 20% stake in IGFL at a price of Rs 75 per share. This is at a 27% premium to the scrip's Monday's closing price of Rs 59.05. The high premium of the offer price seems to have boosted the IGFL counter today .

The A V Birla group currently holds a 37.7% stake in IGFL. Institutional investors hold a substantial stake in IFGL. As on 31 March 2003, local institutions (which include UTI, domestic institutional investors and domestic mutual funds) held 21.1% stake. FIIs held 7.3% whereas GDR holders had a 3.3% stake.

IGFL came into existence after a scheme of restructuring involving the de-merger of the copper and fertilisers business of Indo Gulf Corporation (IGCL). The fertiliser business of the erstwhile IGCL was transferred to IGFL, while the copper business was de-merged to Hindalco Industries(HIL).

The offer is not conditional on any minimum level of acceptance by shareholders. The offer opens on 31 July 2003 and closes on 29 August 2003.

IGFL is now purely a fertiliser manufacturing company. IGFL achieved a turnover of Rs 6,75.21 crore and a net profit of Rs. 172.80 crore for FY 2002-03. There were no comparable results for the previous year due to the restructuring carried out by the company. Operational efficiencies, stringent cost control and better realisation in the market place on the back of a strong brand equity, has enhanced its profitability.

IGFL is amongst the most cost-efficient producers of urea in the country today.