Craftsman Automation Shares in Focus as Promoter Announces Rs 486 Crore Block Deal
Craftsman Automation is set for significant market activity as promoter Srinivasan Ravi prepares to divest a portion of his holding through a major block deal. This transaction comes amidst a period of robust financial performance and recent capital raising activities for the company.
Details of the Rs 486 Crore Block Deal
The upcoming block deal involves the sale of up to 5.25 lakh equity shares, representing approximately 2.01% of the company's total equity. The deal is structured with a base offer size of Rs 375 crore, supplemented by a greenshoe option valued at approximately Rs 111 crore, bringing the total potential transaction value to Rs 486 crore.
The floor price for this transaction has been established at Rs 9,250 per share. This price reflects a discount of up to 2.9% compared to the company's closing price on the NSE as of June 22. It is important to note that this is a secondary market transaction; therefore, the proceeds will go directly to the promoter, Srinivasan Ravi, and not to the company's treasury. Following the execution of this sale, the promoter will be subject to a 180-day lock-up period.
Context of Recent Fundraising and Shareholding
This stake sale follows closely on the heels of Craftsman Automation's successful Qualified Institutional Placement (QIP). Through that QIP, which concluded between June 15 and June 18, the company raised nearly Rs 2,000 crore by allotting 22.98 lakh equity shares to Qualified Institutional Buyers (QIBs) at an issue price of Rs 8,700 per share.
The QIP significantly impacted the company's capital structure, increasing the paid-up equity share capital from Rs 11.93 crore to Rs 13.08 crore. Prior to this block deal, promoters held a 48.70% stake in the company. Analysts view this recent promoter sale as a strategic move to monetize holdings following a sharp re-rating of the stock and to enhance overall market liquidity.
Strong Financial Performance and Stock Momentum
The promoter's decision to sell comes at a time when Craftsman Automation is reporting stellar financial growth. In the March quarter, the company's net profit surged by 74.4% year-on-year to Rs 116.4 crore, up from Rs 66.8 crore in the previous year. This growth was driven by improved operating performance and a significant reduction in exceptional items, which fell to just Rs 54 lakh from Rs 10 crore in the base quarter.
Revenue for the quarter rose 27.3% to Rs 2,226 crore, while EBITDA saw a 47.2% increase to Rs 358.5 crore. Furthermore, EBITDA margins expanded by over 200 basis points to reach 16.1%. This strong fundamental performance has fueled impressive stock momentum, with shares rising 24% in 2024 and approximately 85% over the last twelve months.
Key Takeaways
- Major Divestment: Promoter Srinivasan Ravi is selling up to 2.01% stake via a block deal worth up to Rs 486 crore at a floor price of Rs 9,250 per share.
- Capital Structure Shift: The deal follows a massive Rs 2,000 crore QIP, which increased the company's paid-up equity capital to Rs 13.08 crore.
- Robust Growth Metrics: The stake sale occurs amidst high growth, with the company recently reporting a 74.4% YoY jump in net profit and an 85% return on stock price over the last year.