Craftsman Automation Shares Surge After It Agrees To Buy Auto Parts Maker DR Axion
The company has agreed to buy 76% stake in DR Axion India for Rs 375 crore.
Shares of Craftsman Automation Ltd. ended with gain on Friday after the company agreed to buy a 76% stake in auto-component maker DR Axion India Pvt.
The company will acquire 8.57 crore equity shares, representing 76% of the total equity share capital on a fully diluted basis, for Rs 375 crore. The acquisition will be completed before March 31.
DR Axion manufactures aluminum cylinder heads, a critical auto component used in PVs as an outer shell for internal combustion engines. It has a single manufacturing unit in Chennai that is involved in low-pressure and gravity-die-casting processes. The company reported a turnover of Rs 715.9 crore for fiscal 2022.
Shares of Craftsman Automation rose as much as 13.87% to Rs 3,710.95 apiece, hitting an all-time high on Friday before closing 7.54% higher at Rs 3,500, compared to a 0.47% decline in the benchmark Nifty 50.
The total traded quantity so far in the day is 16.6 times the 30-day average volume.
Of the eight analysts tracking the company, seven maintains a 'buy', and one recommends 'sell', according to Bloomberg data. The 12-month consensus price target implies a downside of 5.4%.