EPC Industries, a small micro-irrigation company, came into the limelight, thanks to its acquisition by Mahindra & Mahindra, a leading tractor manufacturer. M&M has agreed to subscribe to 65.58 lakh shares on a preferential basis giving it promoter's stake of 38%. Since the announcement, the scrip has gone up more than 80% and currently 74% above the open offer price. Although the fund infusion through preferential allotment and association with M&M are positives for the company, its valuation at 74 times its earnings of the past 12 months appears very high. Investors can consider selling in the open market once the current uptrend ends.
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