Greaves Cotton Shares Rally 14% Following Vijay Kedia's ₹25 Crore Investment
On December 10, 2024, Greaves Cotton Ltd saw its share price surge by 14% to ₹245 after ace investor Vijay Kedia acquired a significant stake in the company. This came after Kedia bought 12 lakh shares in a block deal, representing 0.52% of the company’s equity, for an amount of approximately ₹25 crore. This move has further boosted investor confidence in the stock.

Key Highlights of the Acquisition

• The acquisition by Vijay Kedia marked a major development for Greaves Cotton, as the veteran investor’s involvement often triggers optimism in the market.
• The block deal saw trading volumes soar to over one crore shares, reflecting strong investor interest.
• This acquisition is seen as Kedia’s first bet on the company, with his involvement signaling potential future growth for the company.
• Prior to this transaction, Greaves Cotton shares had already gained 8% on December 9, 2024, reaching a 52-week high of ₹215, further bolstered by the block deal activity.

Greaves Cotton and Its Upcoming IPO

The acquisition comes at an exciting time for Greaves Cotton, with the company’s electric vehicle arm, Greaves Electric Mobility Ltd (GEML), preparing for an IPO. Earlier this month, the Greaves Cotton board approved the public listing of its subsidiary, which will include both a fresh issue of shares and an offer for sale by existing shareholders. The IPO is expected to attract significant interest, given the growing focus on electric mobility in India.

Financial Performance and Outlook

Despite the recent surge in its stock price, Greaves Cotton reported a net loss of ₹14 crore for Q2FY25, a marked improvement from a ₹375 crore loss in the same period last year. This is an encouraging sign for the company’s recovery, but it still faces challenges in terms of revenue and EBITDA margins. The company’s revenue for Q2FY25 stood at ₹705 crore, a slight decline from ₹727 crore in Q2FY24. Additionally, EBITDA fell to ₹22 crore, down 52.17%, with margins shrinking by 320 basis points to 3.12%.

Despite these challenges, Greaves Cotton’s stock has been on an upward trajectory, surging 40% since the start of 2024, which is a significant outperformance when compared to the Nifty index, which gained only 13% during the same period.

Company Overview

Founded in 1857, Greaves Cotton is a leading player in the engine manufacturing sector, producing a variety of products, including internal combustion engines, power generation equipment, and transmission systems. The company also produces mining, oilfield, and construction equipment, along with integrated systems and electronics.

As Greaves Cotton continues to expand into the electric vehicle market through its subsidiary, the company is likely to witness increased investor interest, especially with the upcoming IPO of Greaves Electric Mobility Ltd. This move could position the company as a key player in India’s growing electric vehicle industry.

In conclusion, Vijay Kedia’s stake acquisition in Greaves Cotton could be seen as a strong endorsement of the company’s future prospects, particularly with its focus on electric mobility and sustainability. This event, along with the upcoming IPO of its EV arm, has significantly contributed to the stock’s upward momentum.

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