Samvardhana Motherson International’s stock fell 10% on March 16 as a result of significant block trades on the exchanges. In intraday trading on Thursday, the stock fell 10.94% to trade at Rs. 68.40 on the NSE after promoter Sumitomo Wiring Systems (SWS) sold a 3.4% share in the business via block agreements to help pay off some debt.
Over 305.61 million equity shares, or 4.5% of Samvardhana Motherson’s total equity, have changed hands on the NSE as of 09:18 AM. According to exchange statistics, 14.73 million shares, or 0.22 percent of the company’s total stock, were traded on the BSE during this time.
The deal’s floor price has been set at Rs 69.9, which represents a roughly 9% decrease from Wednesday’s closing price of 76.25. The total transaction value will be $195 billion.
The block deal’s lone broker is JPMorgan India Private Limited.
SWS transacted a transaction of Rs 1,607 crore in which it sold around 230 million of the company’s shares. The agreement would lower the company’s stake in Samvardhana Motherson to 14.32%.
According to statistics on ownership patterns, SWS, the promoter firm, owned around 17.55 percent of Samvardhana Motherson as of the December quarter.
With this deal, SWS’s ownership in the firm will drop to around 14.15% from 17.55%.
What Claim Analysts?
In addition, despite sound financials and well considered acquisitions made recently by the firm, the stock may underperform in the short to medium term due to the plan to sell and still significant stake balance with SWS, according to a report from ICICI Securities.
According to Emkay Global Financial Services, the firm has a sizable order book with three-year total revenue visibility of around EUR 3 billion.
After acquiring SAS Autosystemtechnik GmbH, it anticipates that Samvardhana Motherson’s net debt would rise from Rs. 8400 crore in December 2022 to Rs. 9800 crore in FY24. In order to continue debt reduction, the brokerage firm predicts the business would generate a solid operational cash flow of Rs 6300 crore each year throughout FY23–25.
