Samvardhana Motherson shares tank over 10% after promoter sells 3.4% stake via block deals
1 min read 16 Mar 2023, 11:27 AM ISTSamvardhana Motherson promoter Sumitomo Wiring Systems sells 3.4 per cent stake in the company through block deals to fund partial debt repayment
PremiumShares of Samvardhana Motherson International Ltd (SAMIL) plunged 10.94 per cent to trade at ₹68.40 on the NSE in Thursday's intra-day trade after promoter Sumitomo Wiring Systems (SWS) sold 3.4 per cent stake in the company through block deals to fund partial debt repayment.
The floor price for the deal is fixed at ₹69.9, which is about 9 per cent discount to Wednesday's closing price of ₹76.25. The overall deal size will be $195 billion.
JPMorgan India Private Limited is acting as the sole broker to the block deal.
SWS sold about 230 million shares in the company in a deal that is valued at ₹1,607 crore. The deal will reduce the company's holding to 14.32 per cent in Samvardhana Motherson.
SWS, the Japan-headquartered promoter firm, held nearly 17.55 per cent stake in Samvardhana Motherson as of December quarter, according to the shareholding pattern data.
This is the first stake dilution by the promoter SWS in Samvardhana in over 40 years.
“Sumitomo Wiring Systems, Ltd, Japan (hereinafter referred as ‘SWS’), a promoter of Samvardhana Motherson International Limited (hereinafter referred as ‘SAMIL’) has intimated selling of 3.4% shares held in SAMIL through ‘bulk deal’ at stock exchange in India, as part of global deleveraging strategy to fund partial debt prepayment of SWS group in the rising interest environment," the company said in a filing.
Samvardhana Motherson has an average target of ₹98 and the consensus estimate represents an upside potential of 27.60 per cent from its current levels, according to Trendlyne data.
Brokerages remain positive on SAMIL with target on the stock falling in the range of ₹80-120 per share. However, Morgan Stanley and Citi have underweight and sell call on the stock.
