Block Deal Impact: Samvardhana Motherson Shares Plunge ~6%

On Wednesday, March 6, 2024, morning at 10 AM, the share price of Samvardhana Motherson International fell about ~6% after the news that a block deal with about 4.7% equity is said to have changed hands.

Samvardhana Motherson Block Deal Details 

While the deal details are not yet available on the exchanges, Sumitomo Wiring Systems, one of the promoters in Samvardhana Motherson International, is said to have sold its stake. On Wednesday, Sumitomo Wiring Systems was planning to sell around a 6% stake in the company through block deals. The stake sale is estimated at around ₹4,500 crore. On behalf of Samvardhana Motherson International, ICICI Securities and JP Morgan will act as the bankers.

The floor price was set as ₹118, which resulted from a discount of 6.5% to Tuesday’s closing price for the stock.

As of the December quarter, Sumitomo Wiring Systems held a 14.14% stake in Samvardhana Motherson International, which is a majority held by promoters. The report stated that after the transaction, Sumitomo Wiring Systems would have a lock-up for 270 days before the next sale. Sumitomo Wiring already sold 5% of its stake in the company last year. According to a few reports, Sumitomo Wiring Systems is looking to make a complete exit from the automotive component manufacturing company Samvardhana Motherson International.

Impact on Samvardhana Motherson International’s Share Price

The news of this deal triggered strong volume action in the stock, with over 41.84 crore shares changing hands. The total traded value of the shares stood at ₹5,071.24 crore.

On Wednesday, March 6, 2024, around 3:30 PM, on the NSE, the shares of Samvardhana Motherson International were trading around ₹120.85 per share, lower by 3.67%.

About Samvardhana Motherson International

Samvardhana Motherson is one of the top specialised automotive component manufacturing companies for Original Equipment Manufacturers (OEM). The company has a diverse customer base all over the world. Their customer base comprises all leading automobile manufacturers in and outside India. Samvardhana Motherson supports its customers from more than 300 facilities spread across 41 countries on 5 continents in the world.

Samvardhana Motherson International has diversified to help customers in non-automotive businesses, such as health and medical, technology and industrial solutions, aerospace and logistics.

In the recent Q3 FY 2024, Samvardhana Motherson International delivered a solid quarterly performance, posting revenue of ₹25,698 crore, with a year-on-year growth of 27%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.