Auto components maker Sona BLW Precision Forgings is in talks to acquire the rail engineering business of Escorts Kubota in a deal valued at Rs 2,000 crore, a report from CNBC-TV18 stated.
To fund the acquisition, Sona BLW is soon looking to launch a Rs 2,000 crore Qualified Institutional Placement, the report added.
Buoyed by the news, shares of Sona BLW recovered from the day's lows and jumped into the green. At 2.49 pm, shares of Sona BLW were trading 2.2 percent higher at Rs 729 on the NSE, off the day's low of Rs 701.50.
For FY24, Escorts Kubota's railways business reported revenue of Rs 950 crore, contributing 11 percent to the company's overall topline as of the June quarter.
Reports were also making the rounds last year about talks between Escorts and Knorr-Bremse which are likely to have fallen through due to valuation concerns.
Previously, CNBC-TV18 had reported in October 2023 that Knorr-Bremse Group was in talks to acquire Escorts Kubota's railway business for over Rs 4,000 crore.
Last month, Nomura raised its price target for Sona BLW to Rs 788, up from Rs 687 while retaining its 'buy' call on the stock. The brokerage believes that Sona BLW, which is expanding its order book and advancing new product development, can chart a growth trajectory above industry averages in the medium-term.
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