Here’s what triggered a 20% surge in shares of this steel wire products producer

Shares of Bharat Wire Ropes Ltd., the manufacturer and distributor of steel wire products, are locked in a 20% upper circuit on Monday, October 27. This is the first instance that the stock has gained 20% after February 2020.In an exchange filing on Friday, the company said that it has assigned a call option of Compulsorily Convertible Preference Shares (CCPS) to Lloyds Metals and Energy Ltd., post which the company has purchased some CCPS from a consortium of lenders.

Lloyds Metals and Energy has purchased 9,895 unlisted CCPS from Union Bank of India and 4,674 unlisted CCPS from Central Bank of India through off-market transactions, Bharat Wire Ropes said.

During financial year 2020-2021, Bharat Wire Ropes had allotted 38,266 unlisted CCPS to a consortium of banks, towards conversion of loan worth ₹382.66 crore as per the resolution plan sanctioned by the lenders.”The acquisition does not result in any change in the total paid-up capital of the company at this stage,” Bharat Wire Ropes said.

Bharat Wire Ropes is involved in the manufacturing and distribution of products such as strands, hand spliced slings and wire ropes. It caters to oil & gas, mining, shipping industries, among other sectors. The stock currently has a market capitalization of over ₹1,400 crore.

Shares of Bharat Wire Ropes are up 20% at ₹206.74. Close to 90 lakh shares of the stock have been traded so far on Monday, which is significantly higher than the 20-day average of 46,231 shares.