Shares of chemical player Clean Science and Technology Limited recovered following a 7 percent fall in trade on Thursday, August 21, after the firm clarified that a 'punching error' led to the sharp swings in the stock price and extraordinary volumes.
The firm clarified that as a result of an error from broker Spark Avendus, over six crore shares changed hands in the block deal, while only 2.5 crore shares were set to be exchanged. As a result, the stock sank seven percent in trade trade.
However, the company did clarify that 2.5 crore shares, totalling 24 percent of its outstanding equity have been exchanged in a block trade.
At 10.15 a.m., shares were quoting Rs 1,137.9, lower by 3.6 percent on the NSE.
The likely sellers from the promoter group, namely Ashok Ramnarayan Boob, Krishnakumar Ramnarayan Boob and family were looking to dilute up to 24 percent stake as part of the trade.
Reports suggested the sale was likely to raise Rs 2,626 crore or $302 million dollars, with the floor price at Rs 1,030 apiece. This would mark a 13 percent discount to the previous session's closing price.
As per the deal terms, there is a lock up of 3 years with carve-outs for inter-se transfers between promoters and promoters group, sale resulting in change of control or sale pursuant to any court approved scheme, the deal term sheet said.
Spark Institutional Equities (a subsidiary of Avendus Capital) and JP Morgan are the joint brokers for the proposed transaction.
“In relation to the Clean Science block deal, we are reviewing the facts with utmost priority and remain fully committed to addressing this matter responsibly and in line with the highest standards of governance," said Avendus Spark in a statement.
The promoters of Clean Science and Technology currently have a 74.9 stake in the company and during the firm's earnings call in July, had highlighted that they would evaluate the possibility of selling a minority stake to support the family estate planning / management.
FIIs and DIIs hold 6.2 percent and 5.9 percent in the firm, respectively, while the public shareholding in the company is 12.9 percent, as per the June quarter data.
In the June quarter, Clean Science posted revenue of Rs 240 crore, reflecting an 8 percent increase compared to the same period last year. The company also recorded a 5 percent year-on-year growth in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).
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