Big deal worth ₹1600 crore in Aditya Birla Capital
Today, i.e. on 28th October, shares of Aditya Birla Capital are going to be on the radar of investors in the Indian stock market. A big movement can be seen in this stock as soon as trading starts in the morning. According to a news from Money Control, a big investor of the company, Jomei Investments, is going to sell a part of its stake through a big ‘block deal’. This deal is not a small one, but is worth around Rs 1600 crore. More than 5.32 crore shares of the company will be sold in this one deal.
What is this block deal?
According to reports, Jomei Investments is preparing to sell about 2% of its stake in the company. For this, about 5.32 crore shares will be put up for sale. In stock market parlance, when such a large number of shares are traded at one go between a pre-determined buyer and seller, it is called a ‘block deal’. This is usually completed within the first minutes of market opening. The minimum price of shares for this deal, i.e. ‘floor price’, has been kept at Rs 304.55 per share. This price is at a slight discount from the closing price of the share (Rs 310.55) on Monday, October 27.
What does Jomei Investments do?
Now the question arises that who is this Jomei Investments, which is making such huge withdrawal from Aditya Birla Capital? Actually, Jomei Investments is a ‘Special Purpose Vehicle’ (SPV). In simple language, it is a company which is formed for a specific purpose or investment.
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This company is associated with the world’s famous private equity firm Advent International Corporation. Advent International is known for investing in companies around the world. Such big funds selling their stake in a company, which is also called ‘exit’, is considered a major event in the market.
How is the business of Aditya Birla Capital?
The company in which this deal is being done, i.e. Aditya Birla Capital Limited (ABCL), is a part of the giant Aditya Birla Group. It is the holding company of all the financial services of the group. This means that Insurance, Mutual Fund, NBFC and other financial businesses all come under the umbrella of this company. This shows the spread of the company’s business.
Investors are now also eyeing the company’s upcoming September quarter results, which have not been released yet. If we look at the past results, the company’s performance in the June quarter was decent. The consolidated net profit of the company had increased by about 10 percent on year-on-year basis to Rs 835 crore. Meanwhile, the company’s revenue (total income) also increased by 9.6 percent to Rs 9,502.6 crore as compared to the same period last year. These figures show that the company’s earnings are growing steadily.
An important part of the company’s business is its lending portfolio. By the end of the June quarter, the company’s total lending portfolio stood at Rs 1.66 lakh crore. A strong growth of 30% was recorded on annual basis and 5% growth on quarterly basis. This figure shows that the company is able to distribute more loans in the market, which is considered a good sign for its financial health.
Shares have given excellent returns
now let’s talk about that share In which all this action is taking place. Shares of Aditya Birla Capital have given excellent returns to investors this year. Since the beginning of this year, this stock has risen by about 73 percent. Even in the last one month, there has been a good increase of 7.21 percent. When the market closed on Monday (27 October), this share closed at Rs 310.55 on BSE with a gain of 1.52%.