Why Sona BLW Shares Are Up A Day After Blackstone Stake Sale

Shares of Sona BLW Precision Forgings broke the 4- session losing streak to jump up 6% a day after private equity fund Blackstone sold its 20.5% stake in the company.

What Happened: Shares of the auto technology company slumped over 11% on Monday as the private equity fund sold shares worth around ₹4,917 crore. The block deal sale was executed at ₹410/share – a 6% discount from the stock’s closing price on Friday.

However, the company’s stock surged in green today, as it informed the exchanges that shares sold by the fund were picked up by Foreign Institutional Investors, Sovereign Wealth Funds, Domestic Mutual Funds, and Insurance companies. “Marquee investors like the Government of Singapore, Fidelity, FMR, ICICI Prudential Life Insurance, and HDFC MF bought shares from Blackstone in the bulk deal,” the company said in a statement.

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Another boost for the stock today was provided by global brokerage firm CLSA, which maintained its ‘buy’ rating for the stock. The brokerage however revised down the target price by ₹37 to ₹529. That still translates to an over 20% upside. The firm said that Blackstone’s exit has not changed its thesis and added that the company’s order book is very strong and growing.

Price Action: Shares of Sona BLW Precision Forgings traded 5.67% higher at ₹428.80 in the late hours of trading on Tuesday.

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Posted In: automobile industryBlackstone GroupCLSAHDFC