Mahindra CIE stock surges 8% following large block deal
Delhi : The offering will likely be offered at a 5–6% discount to the current market price (CMP). Following a massive block transaction in which around 12.2 million shares, or 3.2% of the firm, were exchanged in a one transaction, Mahindra CIE Automotive Ltd. stock increased by over 8% on Wednesday, according to Bloomberg. However, neither the buyers nor the vendors' identities were disclosed.
The share price of Mahindra CIE reached a high of Rs 493. The stock was trading at Rs 476 on the BSE at 9.30am, up 5% from the previous close, while India's key Sensex index dipped 0.3 percent to 61,794 points. In the meantime, M&M shares declined 0.3% to Rs 1,265 per share. On May 23, CNBC TV reported that Mahindra & Mahindra is set to sell a 3.2 percent interest in Mahindra CIE Automotive Ltd. via a block sale soon, which equates to 1.2 crore shares. After this sale, M&M's ownership interest in the business will be decreased to zero.
The transaction is anticipated to be at a 5–6% discount to the current market price (CMP). On the BSE, Mahindra CIE shares ended Tuesday's trading session 0.40 percent higher than it had at Rs 453.20 a share. "Given that CIE Automotive has been open about raising their share in the firm if the chance arises, we anticipate them to participate as they have not experienced any creeping acquisition-led stake increases in this financial year (FY24). This is good for the stock in the long run since it removes the threat of M&M repeatedly selling their ownership in the firm. We have a favourable opinion of the company given its dedication to expanding its high margin business in India and enhancing efficiency in the European market. From M&M's standpoint, this wasn't a primary investment any longer, so selling it made sense. However, considering the size of the purchase compared to M&M's own scale, there aren't many financial ramifications for the company, according to ICICIdirect.
Mahindra & Mahindra has already sold 2,28,80,000 shares, or 6.05 percent, of Mahindra CIE Automotive in a block sale in March. Shares were sold by the firm for a gross price of Rs 357.39 per unit, or approximately 11% less than the previous closing. After the sale, Mahindra & Mahindra's ownership of Mahindra CIE Automotive dropped from 9.25% to 3.19%.
Mahindra CIE reported a combined net loss of Rs. 657.8 crore for the three months ending December 2022. The business had declared a combined net profit of Rs. 80.2 crore during the same time last year. When compared to the September through December 2016 period, the revenue from operations climbed to Rs 2,246.8 crore for the quarter under review from Rs 1,669.2 crore.
