VIP Industries Ltd shares jump over 7% today as 26% equity stake changes hands in block deal

VIP Industries

Shares of VIP Industries surged more than 7 percent in Wednesday’s trade after about 3.7 crore shares -- roughly 26 percent of the company's equity stake -- changed hands in a large block deal, signalling continued churn in the company’s ownership structure. The stock was trading at Rs 393.5 in the morning session, extending intraday gains despite being down nearly 19 percent year-to-date.

The buyers and sellers in Wednesday’s transaction were not immediately disclosed, but VIP Industries block deal follows a series of promoter stake sale transactions in recent months. The block deal size also mirrors the residual open-offer quantum announced earlier by a consortium led by Multiples Private Equity and its partners.

In September, promoters of VIP Industries had sold a 6.2 percent stake for Rs 343 crore through a block deal, with Piramal Vibhuti Investments and Kiddy Plast offloading 88.4 lakh shares at an average price of Rs 388.2 apiece. Multiples Private Equity Fund had then picked up 60 lakh shares for Rs 233 crore, while Samvibhag Securities acquired 22 lakh shares for Rs 86 crore.

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Those transactions came after a larger deal in July, when Multiples Private Equity Fund IV, Multiples Private Equity Gift Fund IV, Samvibhag Securities, along with Mithun and Siddhartha Sacheti, acquired a 32 percent stake in VIP Industries from a group of promoters. At the time, promoter Dilip Piramal sold the 32 percent controlling stake, retaining about 20 percent as a minority shareholder.

The acquirers had also announced a mandatory open offer for an additional 26 percent stake at Rs 388 per share, implying an outlay of up to Rs 1,437 crore and valuing the combined 58 percent transaction at around Rs 3,200 crore. Wednesday’s sharp move in the stock suggests that the market is reacting positively to the latest ownership development, even as VIP Industries shares continue to nurse deep losses on a year-to-date basis.

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