Shares of Mangalore Chemicals and Fertilisers slumped to a low of Rs 50.6 on the BSE in early trade on Thursday, after Deepak Fertilisers and Petrochemicals Corporation acquired 24.46 per cent stake in the Vijay Mallya-promoted company through an open market transaction for about Rs 180 crore.
The stock, however, recovered sharply to end 1.4 per cent higher at Rs 95.3 on the BSE.
Deepak Fertilisers and Petrochemicals Corporation is a producer of industrial chemicals and fertilisers.
The company through its wholly-owned subsidiary SCM Soilfert had acquired 2.8 crore shares at a price of Rs 61.75 a share on Wednesday. After the acquisition, though Deepak Fertiliser has become the largest shareholder of the company, both the companies said the control would continue to remain with the Vijay Mallya group.
In April, Zuari Fertiliser and Chemicals had also bought over 1.15 crore shares at a price of Rs 38.4 a share.
The acquisition is termed as advantageous for Deepak Fertilisers since Mangalore Chemicals is the largest manufacturer of chemical fertiliser in Karnataka and meets 70 per cent of the fertiliser needs of the state.
The acquisition will not trigger any open offer to the public shareholders of Mangalore Chemicals, as SEBI had raised the trigger for a mandatory open offer to 25 per cent.