ASK Automotive Shares Plunge Following Promoter Stake Sale Announcement

Shares of ASK Automotive Ltd. experienced a sharp decline of 5.32% at market open on Thursday, following the news that promoter Kuldip Singh Rathee plans to sell a 6.05% stake in the company. This decision was disclosed in an exchange filing on Wednesday.

Rathee intends to offload a total stake valued at approximately Rs 516 crore through an offer for sale scheduled for September 26 and 27. The OFS will feature a base offer of 1.08 crore equity shares, representing 5.5% of the company, along with an additional oversubscription option of 10.84 lakh shares, or 0.5%.

As of June 2024, Rathee held a significant 40.23% stake in ASK Automotive, and this stake sale is seen as a pivotal moment for the company. The floor price for the shares has been set at Rs 433 each.

The OFS will open for non-retail investors on Thursday, with the possibility for unallocated bids to be carried forward to the following day. Retail investors will have the opportunity to participate on September 27.

JM Financial Services Ltd. and ICICI Securities Ltd. have been appointed as brokers for the sale.

The scrip fell as much as 5.32% to 443 apiece. It pared losses to trade 3.92% lower at Rs 449.55 apiece, as of 09:38 a.m. This compares to a 0.20% advance in the NSE Nifty 50 index.

It has risen 44.97% in the last 12 months. Total traded volume so far in the day stood at 11 times its 30-day average. The relative strength index was at 51.

Three analysts maintain a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 6.7%.