Bulk deal: Bata promoters sell 2.8% stake for Rs 316 crore

New Delhi: The promoters of Bata India have sold 36 lakh shares or a 2.8 per cent stake of the company via multiple block deals for Rs 1,850 apiece. The deal size aggregated to Rs 316 crore.

According to the data from BSE, more than 36.5 lakh shares of Bata India exchanged hands, which is significantly higher than its two-week average of 0.33 lakh shares.

On National Stock Exchange (NSE), 10.86 lakh shares amounting to Rs 201.51 crore were traded. Reports suggested that block deals have been executed on both exchanges. However, Etmarkets.com could not verify the same independently.

Following the bulk deals, shares of Bata India dropped about 3 per cent to Rs 1,826.05. The scrip settled at Rs 1,887.8 on Tuesday at BSE.

The company had opened deal book for qualified institutional buyers (QIBs) on Tuesday, which saw strong demand from investors. JP Morgan is the sole banker for the deal.

The floor price of the issue was fixed at Rs 1,750, a discount of 7 per cent compared to the previous closing price of the company's stock. The shares have a mandatory lock-in of 90 days.

Despite this deal, promoters still have more than a 50 per cent stake in the company and the total market cap of the company is a little shy of Rs 24,000 crore.

About a week earlier, the shoemaker had reported over two-fold increase in its consolidated net profit at Rs 62.96 crore for the fourth quarter ended March 31, 2022, helped by robust sales, against a net profit of Rs 29.47 crore in the year-ago period.

Its revenue from operations increased 12.77 per cent to Rs 665.24 crore during the quarter under review, as against Rs 589.90 crore in the corresponding quarter of 2020-21.

Brokerage firm Centrum Broking has maintained 'reduce' rating on Bata India with a target price of Rs 1,884. " We believe positives for the next two years are already factored into the current market price."

Axis Securities has a positive view on the counter and has suggested buying it with a target price of Rs 2,200 on the stock. "We believe a strong balance sheet with efficient working capital should help Bata sail through the current situation smoothly," it said.

Bata has maintained healthy operating cash flows and EBITDA margins over the years, making it a capital-efficient business. The company’s operations witnessed a healthy revival along with higher throughput per store and efficient capital allocation, it added.

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