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Nippo Batteries Co Ltd, which is into the manufacture of dry cell batteries, is seeking to expand its product profile to include products to meet the needs of Defence, civil and aerospace sectors.
The company’s shares, which have been on the decline since the exit of Panasonic Corporation of Japan as an equity partner, hit a fresh 52-week low on the stock exchanges today, marking a decline of more than 50 per cent in share value since the exit of the Japanese company in June last year.
Name change
In a communication to the stock exchanges, the company said that it was seeking the approval of the shareholders for changing its name from 'Nippo Batteries Co. Ltd' to 'Indo-National Limited'.
Explaining the reasons for the name change, the company said that it wanted to use its earlier name 'Indo-National Ltd' with a view to 'bringing back familiarity' of the use of the name with the abbreviation 'INL’.
The company is also planning to alter its memorandum of association (MoA) to include design, manufacture and sale of lighting products including incandescent lamp, Compact Fluorescent Lamp, LED bulbs /lamps and solar products. It will also seek shareholders’ nod to add in the MoA the design and manufacture of UPS, inverters, electrical meters, electrical products.
Nippo Batteries seeks to include in the MoA design/manufacture of products relating to defence, civil and aerospace including aero structures-metals, electrical system (wiring harness), hydraulic components, avionics (electronic and information systems) and Maintenance Repair and Overhaul (MRO) to various airline companies. Its objective was to increase the product range and the sales turnover.
The company’s stock however has taken a severe knock since the exit of its Japanese partner from the equity of the company since June last year, which was in contrast to the stock’s immediate reaction to the announcement. Nippo Batteries’ shares had rocketed by over 17 per cent to a 52-week high of Rs 515 on June 11, 2012, after it emerged that the Japanese promoter Panasonic Corporation disposed of its entire stake in the venture to the Indian promoter through a block deal.
Panasonic Corporation that held 30.59 per cent stake in Nippo Batteries Co. Ltd sold its entire stake to P. Dwaraknath Reddy for a total consideration of about Rs 56 crore. After the purchase, his stake in the company went up from 11.92 per cent to 42.46 per cent.
But since then the stock price has been on a descent and the stock hit a new 52- week low of Rs 235 in the BSE today before staging a mild recovery to Rs 241.25, down by Rs 8.45.
Nippo Batteries, which is known to be good dividend play, earned a net income of Rs 76.66 crore in the quarter ended December 2012 (Rs 78.06 crore) and its net profit also was down to Rs 1.07 crore (Rs 1.47 crore). But the paid-up equity capital is very low at Rs 3.75 crore. For the first nine months of the current fiscal, the company’s total income was Rs 243.36 crore (Rs 244.27 crore).
The public shareholding in the company is just above the SEBI prescribed threshold limit at 25.15 per cent. However, though the promoter and promoter group shareholding is at 74.85 per cent, about 60 per cent of their total shareholding is pledged/encumbered.
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