Shares of Wabco India Ltd. fell the most in a year after one of its promoter entities planned to sell its entire stake in the automotive parts maker.
ZF International U.K. Ltd., one of the two promoter companies, plans to sell 18% of its total equity through an offer-for-sale, according to an exchange filing. The initial plan will be to sell 17.1 lakh shares, or 9.05% of the total equity, along with a green shoe option to sell an equal amount of 17.1 lakh shares.
The floor price was set at Rs 5,450 apiece, a discount of 10.7% to Wednesday's closing.
As of December, ZF International U.K. held an 18.1% stake in Wabco India, while the other promoter entity Wabco Asia Pvt. Ltd. owned 75%. Promoter shareholding in the company after the sale will fall to 75%.
The offer-for-sale has opened for non-retail investors on March 25 and will open for retail investors on March 26.
ICICI Direct recommends investors to subscribe to the offer-for-sale as it holds a positive view on the stock amid the cyclical upturn in its user segments, promoter's intent to increase global sourcing from its Indian arm and a wider product basket after the global acquisition of its erstwhile parent. "With a typical commercial vehicle downcycle lasting about two years, the cyclical bottom has been surpassed," the brokerage said in a note. "Buses, however, remain an area of concern given the limited operations of schools, offices and travel activities."
Shares of Wabco India fell as much as 9.9% — the most since March 23, 2020 — to Rs 5,500 apiece. That's also the lowest level in more than a month. Of the four analysts tracking the company, two each have a 'buy' and a 'hold' rating, according to Bloomberg data. The average of 12-month consensus price target implies an upside of 18.1%.
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