Shares of Cyient DLM and Cyient Ltd continued to remain at the focus during the trading session on Wednesday amid the block deal buzz. The promoter entity Cyient offloaded 14.5 per cent equity stake, or 1.15 crore equity shares in Cyient DLM Ltd through block deal earlier today.
Cyient had fixed the floor price for the issue at Rs 748.65 per shares, a discount of 5 per cent over its previous close at Rs 788.50 on Tuesday. The deal size is expected to be Rs 860.9 crore. After the deal, Cyient’s shareholding in Cyient DLM will decline 52.16 per cent from 66.66 per cent earlier.
The heavy volumes on the bourses suggest that the block deal was executed. However, Business Today could not ascertain the details of buyers independently by the time of writing this report. On BSE, more than 1.2 crore shares of Cyient DLM worth Rs 920 crore were traded, while NSE saw volumes of 0.11 crore shares amounting to Rs 86.5 crore as of 9.40 am on Wednesday.
Shares of Cyient DLM tumbled nearly 3 per cent to Rs 764.40 on Monday, with its market capitalization barely holding Rs 6,000 crore mark. On the contrary, shares of parent entity Cyient surged another 6 per cent to Rs 2,049.95 on Wednesday, with a total market capitalization of more than 22,700 crore. The scrip rose nearly 6 per cent to Rs 1,934.05 on Tuesday.
Commenting on Cyient, Global brokerage firm JP Morgan said that the company is divesting stake In Cyient DLM and the proceeds can be used for merger & acquisition and debt repayment. It intends to utilise for investments In the semiconductor business, it said. JP Morgan has maintained its 'overweight' rating with a target price of Rs 2,100 on the stock.
Kotak Institutional Equities added that Cyient hopes to expand the addressable market offering turnkey assets to clients in the medical, industrial and telecom industries. "We believe the opportunity is attractive, but not without a few risks. Success would boil down to a choice of programs and the ability to leverage IP to minimize custom chip design timelines," it added with a buy and fair value of Rs 2,050.
Motilal Oswal Financial Services said that Cyient DLM is likely to capture its share of the pie on the back of its strong core competencies and high technical capabilities. Going ahead, it expects the company to sustain its growth momentum, aided by expected healthy order inflows; high customer stickiness; promoter heritage.
"We estimate Cyient DLM to report a CAGR of 33 per cent, 50 per cent and 69 per cent in revenue, Ebitda and adjusted PAT over FY24-26. We maintain our FY25/FY26 EPS estimates and retain our 'buy' rating on the stock with a target price of Rs 880, valuing it at 40 times FY26 EPS," Motilal Oswal added.