GMM Pfaudler tumbles 16% after promoter offloads stake in block deal

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The share price of GMM Pfaudler declined over 16 percent in the morning trade on December 16 after 16 percent of the company's equity changed hands in a block trade. It was earlier reported that promoter Pfaudler Inc was looking to sell 30 percent stake in the company for Rs 2,283 crore.

This implies a part of the stake sale was completed during the block deal window. Multiple other large trades in the counter followed.

At 9.45 am, the stock was quoting at Rs 1,636 on the National Stock Exchange, down 15 percent. Trading volumes at 10,111,916 shares were significantly higher than 20-day average volume of 86,312.

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As per sources, the floor price for the deal was set at Rs 1,700 apiece, which was at 11.67 percent discount to the company's closing price a day earlier. The buyers side are not known as of now.

Once the entire sale is completed, total promoter stake will fall to 26.18 percent from 56.06 percent as of September end. Axis Capital was the sole broker to the block trade, as per the deal terms.

GMM Pfaudler is a leading supplier of engineered equipment and systems to chemical and pharma markets. Its product lines cover a broad portfolio that includes fluoropolymers, filtration and drying, engineered column systems, lab and process glass, sealing technology and alloy systems.

In Q2FY23, the company reported a 23 percent year-on-year jump in revenue from operations to Rs 780 crore. Net profit jumped over 50 percent in the same period to Rs 96 crore. Total order backlog stood at Rs 2,119 crore.

The stock has been one of Saurabh Mukherjea's top picks for its market share, capital allocation and strong customer relationships. It trades at a trailing twelve month (TTM) price to earnings ratio of 46.8x.