Cyient, a leading IT firm, has completed the sale of a 14.5% stake in its subsidiary, Cyient DLM, through a block deal finalized on August 21, 2024. This transaction marks a significant step in Cyient’s strategic plan to optimize its capital structure and focus on key growth areas.
Details of the Block Deal
- Stake Sold: Approximately 1.2 crore equity shares, representing 14.5% of Cyient DLM’s total equity, were sold.
- Sale Price: The shares were sold at Rs 766 per share, reflecting a discount from the previous day’s closing price of Rs 788.05 on the NSE.
- Proceeds: The total amount raised from this sale is Rs 883.2 crore.
Utilization of Proceeds
- Capital Requirements: The funds will be used to address capital needs.
- Investment Plans: The proceeds will support investments in Cyient’s semiconductor business and other growth initiatives.
- Debt Reduction: A portion of the funds will be allocated to retire existing debts.
Financial Impact and Market Reaction
- Stake Reduction: Post-deal, Cyient’s stake in Cyient DLM has decreased from 66.66% to 52.16%.
- Revenue Contribution: For FY24, Cyient DLM’s revenue was Rs 1,192 crore, contributing 17% to Cyient’s total revenue of Rs 7,147 crore.
- Net Worth: As of March 31, 2024, Cyient DLM’s net worth stood at Rs 909 crore, representing 20% of Cyient’s total net worth of Rs 4,557 crore.
Market Performance Post-Deal
- Stock Performance: On the day of the deal, Cyient’s shares traded 4.90% higher at
₹2,029.60 on NSE
Strategic Move for Future Growth
Cyient’s decision to reduce its stake in Cyient DLM aligns with its broader strategy to realign resources towards high-potential areas, particularly its newly announced semiconductor business. The funds raised from this transaction will help reduce debt and position the company for sustainable long-term growth.
Investment Banking Partner
Axis Bank acted as the investment banker for this block deal, ensuring a smooth and efficient transaction process.
