GMM Pfaudler plunges 18% after promoter sells stake via block deal

Shares of GMM Pfaudler nosedived over 18% in intraday trade on Friday, driven by strong volume amid a block deal. Pfaudler Inc, a promoter of GMM Pfaudler, has reportedly sold a majority of its stake in the company in a block deal at a floor price of ₹1,700, a discount of 11.9% to Thursday’s closing price of ₹1,930.70 on the BSE.

Pfaudler Inc, which owned 31.88% stake at the end of the September quarter, was looking to offload a 29.88% shareholding, or 1.34 crore shares, in the company via a block deal today. The stake sale would fetch ₹2,278 crore to the promoter entity.

Reacting to the news, GMM Pfaudler shares opened sharply lower at ₹1,727, down 10.5% against the previous closing price of ₹1,930.70 on the BSE. During the session, the smallcap counter declined as much as 18.4% to hit a low of ₹1,575 amid strong volume trade. A total of 1.17 crore shares, constituting nearly 25% of the total equity of the company, changed hands on the NSE and BSE at the time of reporting. The market capitalisation declined to ₹7,415 crore. In comparison, the BSE Sensex was trading 95 points lower at 61,704 levels, rebounding from day’s low.

GMM Pfaudler shares have delivered a positive return of 12% in the past one year, while it has risen over 26% in the six month period. In the last one month, the counter has seen some consolidation after touching a 52-week high of ₹2,189.50 on November 7, 2022. It has fallen more than 15% in a month and 13% in a week. The stock hit a 52-week low of ₹1,249.75 on June 14, 2022.

GMM Pfaudler is a leading supplier of engineered equipment and systems to chemical and pharma markets. Its product lines cover a broad portfolio that includes fluoropolymers, filtration and drying, engineered column systems, lab and process glass, sealing technology and alloy systems. It has 16 manufacturing locations with an extensive sales and service network and employs more than 1,800 people across 4 continents.

Last week, GMM Pfaudler, through its wholly-owned subsidiary Pfaudler GmbH, entered into an agreement to acquire Mixel France SAS and its wholly-owned subsidiary Mixel Agitator (collectively known as Mixel). Mixel specialises in the design and manufacture of standard and made-to-measure mixing systems used across various industries. It has two manufacturing facilities, one in Lyon, France and the second in Beijing, China.

“The acquisition of Mixel is in line with our growth and diversification strategy, it further enhances our product portfolio and also strengthens our Mixing business by bringing in additional technology and process know-how,” Tarak Patel, managing director, had said on the deal.

The company will acquire a 100% stake in Mixel for a total consideration of 7 million euros and the transaction will be funded through a mix of internal accruals and debt. Subject to French law and other regulatory approvals, the transaction is expected to close in February 2023.