Mid cap stock jumps 7% after company’s promoter offloaded 6.6% stake in the company

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Mid cap stock jumps 7% after company’s promoter offloaded 6.6% stake in the company

The shares of one of the leading suppliers of axle bearings to the heavy commercial vehicle (HCV) segment gained 7.5% to ₹4,250.45 per share on Tuesday after 5 million shares change hands via block deals.

At 12:10 a.m., Timken India Ltd. shares were quoted at ₹4,163.95 per share, up 5.34 percent from the previous close price. The company has a market capitalization of ₹31,320 crore.

On Tuesday, over 5 million shares, representing 6.6 percent of the total equity of Timken India, changed hands via block deals.

According to reports. Timken India’s promoter, Timken Singapore, aimed to offload this 6.6 percent stake at a floor price of ₹3,550 per share, which is a 10.2 percent discount to Monday’s closing price. This sale could generate approximately ₹1,775 crore for the promoters.

Previously, in June 2023, Timken India experienced a significant trade involving nearly 10 percent of its equity, equating to 84.5 lakh shares valued at ₹2,629 crore. During this time, Timken Singapore sold 63 lakh shares, or 8.3 percent of the company’s total equity, through a block deal.

As of the March quarter, Timken Singapore held a 57.7 percent stake in Timken India, according to stock exchange data. Timken India Ltd is involved in manufacturing, distributing, and selling anti-friction bearings, components, accessories, and mechanical power transmission products for a diverse customer base across various sectors.

Incorporated in 1987 as Tata Timken Limited, a joint venture between Tata Iron and Steel Company and The Timken Company, Timken India has planned a capital expenditure of more than ₹400 crore for FY ’25 to establish a new production facility at the Bharuch plant by the end of the year.

In Q4, the company’s revenue distribution was as follows: the rail business segment accounted for 34%, Mobile segment for 17%, distribution segment accounted 19%, Process Industry for 17%, and Exports for 14%. The company anticipates continued growth in its rail segment, especially in freight, Vande Bharat, and metro areas.

The contribution from exports decreased to 14% in the current quarter, down from a previous high of 30%-35%. However, the company aims to increase exports to 25%-30% of total revenue in the future.

Timken India Ltd shares have gained 42% in the last six months and 31% over the past year. The company’s revenue grew by 12% year-on-year, from ₹803 crore in Q4FY23 to ₹898 crore in Q4FY24, with net profit increasing by 34% from ₹105 crore to ₹141 crore during the same period.

According to the recent shareholding pattern, the company’s promoter holds a 57.70% stake, Foreign Institutional Investors (FII) hold 7.20%, and Domestic Institutional Investors (DII) hold 23.62%.

Written by Omkar Chitnis


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