Apollo Tyres , a leading tire manufacturer, has emerged victorious in a significant tax litigation case, marking a substantial financial relief for the company. The Madras High Court has quashed proceedings initiated under Section 74 of the Central Goods and Services Tax (CGST) Act against Apollo Tyres, effectively setting aside a demand of Rs 2,791 million in a matter related to composite supply.

Key Highlights of the Court Decision

• Proceedings Quashed: The Madras High Court has nullified the proceedings initiated under Section 74 of the CGST Act against Apollo Tyres.
• Financial Impact: The court's decision has resulted in the elimination of a Rs 2,791 million tax demand against the company.
• Case Background: The litigation was related to a composite supply matter, details of which were previously disclosed to the exchanges in August 2023.

Implications for Apollo Tyres

This legal victory represents a significant financial reprieve for Apollo Tyres, potentially strengthening its financial position. The quashing of the tax demand not only eliminates a substantial liability but also brings closure to a pending legal issue that had been hanging over the company since at least August 2023.

Financial Context

While this legal development is noteworthy, it's important to view it in the context of Apollo Tyres' overall financial health. Based on the most recent balance sheet data available:

The resolution of this Rs 279.1 crore (2,791 million) tax liability, while significant, should be considered in light of the company's total asset base of over Rs 27,000 crore.

Conclusion

The Madras High Court's decision marks a positive development for Apollo Tyres, alleviating a substantial tax burden and resolving a pending legal issue. This outcome may contribute to improved investor confidence and potentially impact the company's financial planning and strategies moving forward. However, stakeholders should continue to monitor the company's overall financial performance and market position for a comprehensive understanding of its prospects.

Apollo Tyres Declares Interim Dividend

Apollo Tyres Ltd. , a leading tire manufacturer, has announced an interim dividend for the fiscal year 2023-24. The company's board of directors has declared an interim dividend of ₹3.00 per equity share.

Key Details

• Dividend Amount: ₹3.00 per equity share
• Face Value: ₹1.00 per share
• Dividend Percentage: 300%
• Record Date: March 5, 2024

Upcoming Board Meeting

The company has also scheduled a board meeting for February 29, 2024. This meeting is expected to cover several important agenda items:

1. Consider and approve the interim dividend for FY 2023-24
2. Consider raising funds through the issuance of non-convertible debentures (NCDs) on a private placement basis

Investor Impact

Shareholders of Apollo Tyres should take note of the following dates:

• Ex-Dividend Date: March 4, 2024
• Record Date: March 5, 2024

Investors who hold Apollo Tyres shares at the close of business on the record date will be eligible to receive the interim dividend.

Company Overview

Apollo Tyres Ltd. is a prominent player in the Indian tire industry, known for its wide range of products catering to various vehicle segments. The announcement of this interim dividend and the upcoming board meeting to discuss fund-raising through NCDs indicates the company's focus on shareholder returns and strategic financial planning.

Conclusion

The declaration of a 300% interim dividend is a positive signal for Apollo Tyres' shareholders, reflecting the company's strong financial position and commitment to returning value to its investors. The upcoming board meeting to discuss NCD issuance also suggests that the company is exploring options for capital raising, which could potentially fund future growth initiatives or refinance existing debt.

Investors and market analysts will be keenly watching the outcomes of the February 29 board meeting for further insights into Apollo Tyres' financial strategies and future outlook.