Small Cap Stock down 4% after speculations about promoters selling a stake

The shares of Triveni Engineering and Industries declined 6.36% on Thursday to reach an intraday low of ₹ 275.25. They were trading at ₹ 276.70 apiece at 02:31 PM on Thursday. 

Around 20.73 million shares representing 8.58% of Triveni Engineering changed hands on the BSE. The names of the buyers and sellers were not known immediately. 

However, according to reports, the company’s promoter Dhruv Sawhney is likely to sell a 7.03 percent stake, approximately 1.7 crore shares, via block deals on December 08, 2022. As a result, the company’s share price declined by 7.61% since then. 

As on September 30, 2022, Dhruv Sawhney held 37.3 million equity shares or 15.43 percent stake in Triveni Engineering, according to the shareholding pattern. 

Triveni Engineering and Industries Ltd is an integrated sugar manufacturing company, which is also involved in manufacturing high-speed gears and project implementation in the fields of water and waste-water treatment and pollution control. 

The company had divested its entire 21.85 percent stake in Triveni Turbine worth Rs 1,609 crore, unlocking significant value for shareholders. It said that the proceeds will be utilized for rewarding shareholders as well as for funding the growth and expansion of the business. 

In another development, Triveni Engineering announced a proposal to buy back up to 22.86 million equity shares from shareholders at a price of ₹ 350 per share for an aggregate amount not exceeding ₹ 800 crores. 

Triveni Engineering has a market capitalization of ₹ 7106 crores and is a small-cap company. It has a good return on equity of 24.45% and an ideal debt-to-equity ratio of 0.82. Its shares were trading at a price-to-equity ratio of 17.85, which is lower than the industry average of 20.40, indicating that the stock might be undervalued. 

Written by Simran Bafna