Akzo Nobel India block deal: Stock tumbles 13% as promoter likely sells 11.4% equity stake for Rs 1,638 crore

Akzo Nobel India

Shares of Akzo Nobel India Ltd plunged sharply in early trade on Wednesday, sliding 13 percent, after a large block deal involving a significant equity stake sale -- likely by a promoter entity -- hit the market. The stock was trading at Rs 3,153.10 in early morning trade, down 12.99 percent on the day. Including Wednesday’s decline, Akzo Nobel India shares are down about 11.5 percent year-to-date.

As many as 51.9 lakh shares, representing around 11.4 percent of the company’s equity, changed hands through block deals at a price of Rs 3,159 per share. The transaction was valued at approximately Rs 1,638.3 crore. The buyers and sellers in the transaction have not been officially disclosed, but going by reports, promoter entity Imperial Chemical Industries is likely to have been the seller.

On Tuesday, CNBC-TV18 had reported citing sources that Akzo Nobel’s promoter entity Imperial Chemical Industries was preparing to sell up to a 9 percent stake in the company via a block deal. At the end of the July-September quarter, Imperial Chemical Industries held a 45.46 percent stake in Akzo Nobel India. The total promoter holding in the company stood at 69.76 percent as of the September quarter. London-based Imperial Chemical Industries is an affiliate of Dutch paints major AkzoNobel.

The block deal comes amid a recent history of promoter stake sales in the company. In September, multiple block transactions were executed in Akzo Nobel India, with Imperial Chemical Industries selling 22.77 lakh shares, or about 5 percent equity, for roughly Rs 765 crore at an average price of Rs 3,359 per share. Buyers in those transactions included Nippon India Mutual Fund, WF Asian Smaller Companies Fund, Goldman Sachs Funds, Aditya Birla Sun Life Mutual Fund and Bandhan Mutual Fund, among others.

Separately, Akzo Nobel India reported a sharp jump in consolidated net profit for the second quarter, largely driven by a one-time exceptional gain. The company posted a consolidated net profit of Rs 1,682 crore for the quarter, compared with Rs 97 crore in the year-ago period, aided by an exceptional gain of Rs 1,874 crore. Revenue, however, declined 15 percent year-on-year to Rs 835 crore and fell 16.1 percent sequentially. Other income declined to Rs 7.7 crore from Rs 9.1 crore a year earlier.

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