IT engaged in the business of providing global technology services and solutions jumped upto 6 percent in the day’s trade following a stake sale in its subsidiary to strengthen its semiconductor business.
Price Action
With a market capitalization of Rs. 22,244 Crores, the shares of Cyient Limited were trading at Rs. 2,005.40 per equity share, up 4 percent from its previous day’s close price of Rs. 1,934.05. It has delivered a return of 30 percent in a year.
What Happened
The Board of Directors of Cyient Limited has considered and approved the sale of upto ~1.15 Crore equity shares or 14.50 percent stake of its shareholding in its subsidiary Cyient DLM Limited through the block deal window.
The expected date for completion of the sale/ closing is 21st Aug 2024 or such date as mutually agreed between the Company and the buyer. As per sources the deal is said to be valued at Rs 860.9 Crores and will have a floor price of Rs 748.65 per share.
As of Q1FY25, Cyient Limited holds a 66.66 percent stake in Cyient DLM Limited, and post the stake sale of 14.50 percent, it currently holds a 52.16 percent stake in it.
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Proceeds Utilization
The capital proceeds arising from the stake sale will be used for the Company’s capital requirements, including but not limited to key investments in our recently announced Semiconductor business to support its growth, various organic and inorganic investments, and retirement of debts of the Company.
Strengthing Semiconductor Business
In addition Cyient Limited announced that it has established a fully-owned subsidiary for the strategic expansion of its Semiconductor business, thereby Strengthening its decades of Turnkey Application Specific Integrated Circuits (ASIC) expertise by delivering world-class specialized turnkey ASIC design and chip sales.
About the Company
Cyient Limited is engaged in the business of providing global technology services and solutions, specializing in geospatial, information technology solutions, engineering design, data analytics, and many more.
Financials and Ratios
Its Revenue from operations declined by 0.64 percent from Rs. 1,686 Crores in Q1FY24 to Rs. 1,676 Crores in Q1FY25, accompanied by profits of Rs. 169 Crores to Rs. 148 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 18.8 percent, and a return on capital employed (ROCE) of 21.9 percent. It has reported a debt-to-equity ratio of 0.18.
Written by: Bharath K.S
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