Samvardhana Motherson Shares Hit 14-Month High On Yachiyo, Prysm Acquisition

Shares of Samvardhana Motherson International Ltd. surged nearly 10% to hit a 14-month high on Wednesday after it agreed to buy an 81% stake in a subsidiary of Honda Motor Co.

The company will acquire the stake in Yachiyo Industry's four-wheeler business via its unit, SMRP BV. The stake is valued at 22.9 billion Japanese yen or Rs 1,301 crore. Honda Motor will own the remaining 19% stake, making it an 81:19 joint venture.

Samvardhana Motherson also announced an investment of $14 million, or Rs 114.97 crore, into the 12% optionally convertible secured note issued by Prysm Systems Inc.

Shares of Samvardhana Motherson rose 6.75% to Rs 90.90 apiece as of 11.46 am, compared to a 0.03% rise in the NSE Nifty 50. The scrip rose as much as 9.98% intra-day, the most in over 28 months since Feb. 15, 2021.

The total traded volume stood at 8.9 times its 30-day average. The relative strength index was at 74, implying that the stock may be overbought.

Out of the 21 analysts tracking the company, 18 maintain a 'buy' rating, two recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average calculated from the 12-month price target given by analysts implies a potential upside of 7.4%.