It was known that Boob family is expected to sell 24% stake of the Company. In the last conference call this was discussed and management (Sikchi family) had informed that it was due to Boob family’s estate planning and not any operational concerns. Sikchi family had also committed that they are not looking to sell any stake.
- Newspaper sources have now confirmed that Boob family has sold 2.5 crore shares representing about 24% stake in the company.
- Before the transaction, both promoter family held together 74.96% stake in the Company.
- The floor price for the transaction was set at Rs 1,030/ share which was about 13% discount to the previous day’s closing price.
- Actual transaction happened at around Rs 1,070-1,080/ share
- Buyers included Nippon India MF, SBI MF, Norges Bank on Account of The Government Pension Fund and Bajaj Allianz.
The selloff removes a major overhang from the stock.
It’s baffling why the Boob family was ready to sell at such a deep cut despite the current stock price already significantly lower from the highs. The stock had reached an all time high of around Rs 2,600 in January 2022.
Operational performance and management commentary doesn’t warrant any reason for concern. Yes, China (20%) and US (18%) are two major customers for the Company but the product profile, innovations and management quality seems capable to manage the temporary headwinds.