Why Advanced Enzyme’s shares soared nearly 15% today

Advanced Enzyme Technologies Ltd, one of the major manufacturers of enzymes in the country, zoomed almost 15% on Tuesday after an existing shareholder increased its stake in the company.

Shares of Advanced Enzyme jumped as much as 15.5% to touch a high of Rs 308.40 apiece on the BSE on Tuesday morning before cooling off a tad to trading around Rs 306.35 apiece by 10:45 AM, stock-exchange data showed.

The company now commands a market valuation of a tad above Rs 3,400 crore.

Total traded quantity jumped to 1.80 lakh shares, compared with the two-week average of 34,000 shares. The shares are now up around 19% from their one-year low, touched in February this year, but still 27% down compared with the one-year high hit in October last year.

Advanced Enzyme, incorporated in 1989, researches, develops, makes and sells proprietary products developed from indigenous enzymes. The company listed on stock exchanges in 2016. The company’s share price had hit a peak of nearly Rs 500 last May.

The share price surge on Tuesday came after Nalanda Capital, a Singapore-based alternative investment firm, increased its stake in the company. Nalanda bought a 2.6% stake in Advanced Enzyme for about Rs 80 crore.

Nalanda had originally invested in Advanced Enzyme in mid-2020 when it bought a stake from the company’s promoters, the Rathi family. It purchased more shares twice earlier this year, taking its stake to 6.23%.

After the latest purchases on Monday, Nalanda’s total stake has risen to almost 9%.

Nalanda is now the second-largest public market investor in Advanced Enzyme after investment firm Orbimed, which owns about 12.1% of the company.

Advanced Enzyme’s revenue increased 6% in the year through March 2022 to Rs 529 crore, but its operating margin narrowed and its net profit fell 18%. For the first quarter ended June 30, the company’s fell 12% while net profit more than halved from a year earlier.