Shares of CK Birla Group firm Hindustan Motors hit a 5% lower circuit on Wednesday after the company signed a deal to sell its ‘Contessa’ brand to SG Corporate Mobility Pvt. Ltd for an undisclosed sum. The auto stock has been reeling under selling pressure for the last six sessions and has fallen nearly 26% during this period.

Hindustan Motors in an exchange filing on Tuesday said it has executed a brand transfer agreement with S.G. Corporate Mobility to sell its Contessa Brand, including the trademarks and other related rights. The company, however, did not disclose the transaction involved in the deal.

“Hindustan Motors Limited has executed a Brand Transfer Agreement with S.G. Corporate Mobility Private Limited on 16th June 2022 for the transfer of the Contessa Brand (including the trademarks having application number 5372807) and certain related rights (Contessa Brand),” it said in a BSE filing.

The company further stated that the transfer of the Contessa Brand will be effective subject to fulfillment of the terms and conditions as prescribed in the agreement.

Reacting to the news, Hindustan Motors share price opened the day in negative terrain and locked in a lower circuit of 5% at ₹18.95, against the previous closing price of ₹19.90 on the BSE. In comparison, the BSE benchmark Sensex declined 528 points to 52,004 levels at the time of reporting.

Technically, the microcap stock traded in a bullish range, higher than its 20-day, 50-day, 100-day, and 200-day moving averages, but lower than 5-day moving averages. The stock has fallen 18% in a week, while it has given 54% returns in the current calendar year and 132% over one year.

Despite 26% fall in the last six sessions, the stock has risen 77% in the past one month amid optimism over a comeback plan. The country’s first-ever carmaker is reportedly in talks with or a joint venture with a European auto company focused on the electric vehicle (EV) space.

The exchange had sought a clarification from the company on May 30, 2022, with reference to significant movement in price, in order to ensure and safeguard investors on the latest relevant information about the company.

Hindustan Motors (HM) was established during the pre-Independence era and began operations in 1948 in Uttarpara in district Hooghly, West Bengal, where the company began the production of the iconic Ambassador. It was the largest car manufacturer in India before the rise of Maruti Udyog. Contessa was a premium brand sold in India by Kolkata-based Hindustan Motors during the 1980s to early 2000s. It was positioned above the company’s then popular model Ambassador.

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