Shares of Bajaj Steel Industries hit a 52-week high of Rs 1,098.90, surging 13% on the BSE in intraday trade on Friday. The stock was up 11% at 1:47 pm, while the S&P BSE Sensex was down 0.8%.

Shares of the industrial products company rallied 23% in the past four sessions after its board approved the sale of its plastics unit (Superpack) to Nagpur-based VSA Business Solutions Private Limited for Rs 4.75 crore. The VSA business is currently engaged in importing, exporting, manufacturing, and handling plastics and plastic products.

Also, shares of Bajaj Steel have risen 107% over the past six months, compared with a 1% gain in the S&P BSE Sensex. Currently, the stock is classified as ‘X’ on the BSE. Group X includes all stocks listed only on the BSE and settled by trade.

Bajaj Steel operates under two business segments: Steel Division and Superpack Division. The steel sector is active in manufacturing cotton processing machines, prefabricated buildings, engineered products, and other industrial products. The Superpack segment produces various masterbatches used in the plastics industry.

However, considering the company’s growth prospects and future expansion, the board wants to focus entirely on the steel segment business, Bajaj Steel said while laying out the rationale for the downturn sale.

In addition, the Superpack division has suffered losses in the past few years, and the losses in the Superpack division have led to a decline in the overall profitability of the company. Hence, it also affects the financial performance of the company.

“As such, it is desirable to dispose of the Superpack division on a going concern basis. The disposal will bring benefits such as strengthening the company’s balance sheet and substantial growth opportunities in line with its strategic direction,” Bajaj Steel said.

Meanwhile, in the October-December quarter (Q3FY23), Bajaj Steel reported a six-fold jump in its consolidated net profit to Rs 21.16 crore compared to Rs 3.32 crore a year earlier. Operating income jumped 71% to Rs 161 crore from Rs 94 crore in Q3FY22.