HomeBusiness NewsCompanies NewsSojitz Corporation looks at selling up to 1.6% stake in Samvardhana Motherson via block deal: Sources

Sojitz Corporation looks at selling up to 1.6% stake in Samvardhana Motherson via block deal: Sources

The deal is likely at a discount of up to 6 percent at current market price. The floor price of the block deal is Rs71 per share, sources said adding that the deal size is likely pegged at $92 million. 

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By CNBCTV18.com January 16, 2023, 6:43:44 PM IST (Published)

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Sojitz Corporation looks at selling up to 1.6% stake in Samvardhana Motherson via block deal: Sources
Sojitz Corporation is looking to sell up to 1.6 percent stake in Samvardhana Motherson International Ltd via a block deal, people in the know of the matter told CNBC-TV18
.

The deal is likely at a discount of up to 6 percent at current market price. The floor price of the block deal is Rs 71 per share, sources said adding that the deal size is likely pegged at $92 million.

Last week, the company was in the focus because German carmaker Volkswagen Group’s deliveries fell to the lowest in over a decade, according to reports.

According to a company presentation, Volkswagen Group accounts for around 7 percent of the revenue of Samvardhana Motherson while Germany contributes around 13 percent to its revenue.

Last month, brokerage firm Motilal Oswal initiated a ‘buy’ rating on the company's stock.

Motilal Oswal recommended investors buy the shares of the auto ancillaries company with a price target of Rs 95 apiece.

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It said Samvardhana Motherson was well-placed to benefit from easing supply issues. Moreover, the company is a big beneficiary of global mega trends emerging in the automotive industry, the brokerage firm added.

Motilal Oswal pointed out that Samvardhana Motherson has weathered a storm over the last two-to-three years and now trades at a reasonable valuation. The brokerage firm expected good growth across the company’s businesses despite commodity cost deflation.

Prior to this last month, ICICI Securities also maintained its ‘buy’ rating on the stock with a target price of Rs 74.

Explaining the rationale behind the rating, ICICI Securities said that Samvardhana Motherson International is targeting to treble its revenue to $36 billion in the next 3-4 years through a mix of organic and inorganic growth, with 25 percent of the revenue mix aimed to come from the non-auto segment (currently it is sub-3 percent).

Its shares ended 2.1 percent lower on the BSE on Monday.

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