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Automobile stock falls 8% as promoters plan to sell stakes via Block Deal

According to a CNBC report, Mahindra & Mahindra Limited (M&M), an Indian multinational automotive manufacturing corporation that holds a 9.25% stake in Mahindra CIE announced that it is planning to sell its stake.

The company announced that it will offload a 6.5% stake in Mahindra CIE via block deals on Monday. The deal size is said to be worth Rs 892.6 crore with the exchange of shares at an average price of Rs 365 per share.

On the news, the shares of M&M lost about 3% on Monday and ended the session at Rs 1,192 levels. While the shares of Mahindra CIE Automotive (NS:) crashed by 7.7 percent and closed at Rs 363 levels around the same time.

Mahindra CIE Automotive Ltd is engaged in the business of production and sale of automotive components to original equipment manufacturers and other customers in India and overseas.

M&M Ltd is one of the most diversified automobile companies in India with a presence across 2-wheelers, 3-wheelers, PVs, CVs, tractors & earthmovers. The group has a presence across 22 industries and 100+ countries and operates 150+ entities on a consolidated basis.

Through its subsidiaries and group companies, the company has a presence across financial services, auto components, hospitality, infrastructure, retail, logistics, etc.

Looking into the financials of Mahindra CIE Automotive Ltd, the revenues have decreased from Rs 2,723.15 crores in Q2 v/s Rs 2,246.84 crores in Q3. On a contrasting note, the net profit has shown a rise from Rs 171 crores in Q2 v/s Rs 194.4 crores in Q3.

The profitability ratios of the company have shown improvements with ROE moving from 2.24 percent in FY20-21 v/s 7.76 percent in FY 21-22. ROCE moved from 3.95 percent in FY20-21 v/s 11 percent in FY 21-22.

In the most recent quarter, the promoters hold 74.96 percent of the stakeholdings in the company. FII’s have marginally increased their stake representing their current holdings of 7.29 percent in the company.

Written by Amit Madnani

The post Automobile stock falls 8% as promoters plan to sell stake via Block Deal appeared first on Trade Brains.

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