Shares of Timex Group India witnessed a sharp sell-off on Monday, December 29, with the stock plunging over 8% to trade around Rs 322 on the BSE, after the company’s promoter announced an offer-for-sale (OFS) at a significant discount to the prevailing market price.
Key reason: Promoter launches OFS at Rs 275 floor price
The decline in Timex Group India shares comes after Timex Group Luxury Watches BV, the promoter of the company, announced plans to sell a 4.47% stake through an OFS on December 29 and December 30.
According to the regulatory filing, the promoter is offering 45.09 lakh shares, representing 4.47% of the company’s paid-up equity capital, at a floor price of Rs 275 per share, which is at a steep discount to Friday’s closing price.
The OFS opened for non-retail investors on December 29, while retail investors can participate on December 30.
Potential increase in stake sale adds pressure
Adding to the negative sentiment, the promoter has also retained the greenshoe option to sell an additional 4.47% stake in case of oversubscription. If exercised fully, the total stake sale could go up to nearly 8.93% of the company’s equity.
Currently, promoters hold 59.93% stake in Timex Group India, and the proposed sale marks another reduction in promoter ownership.
Market reaction: Discounted pricing weighs on sentiment
The OFS floor price of Rs 275, well below the stock’s market price prior to the announcement, triggered immediate selling pressure as traders adjusted expectations toward the offer price. Stocks often gravitate closer to the OFS floor during such transactions, especially in the short term.
By mid-morning trade, Timex Group India shares were down 8.4%, erasing nearly Rs 30 per share in value in a single session.
Not the first promoter divestment
This is not the first instance of promoter stake dilution in the company. In June earlier this year, Timex Group Luxury Watches BV had sold around 1.51 crore shares, equivalent to 15% of the company’s equity, through the OFS route.
What investors are watching
Investors will now closely monitor:
- Subscription levels in the ongoing OFS
- Whether the additional greenshoe option is exercised
- Near-term price movement post completion of the OFS
Until the sale concludes, the stock may continue to remain volatile.
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