Craftsman Automation’s shares rallied more than 10 per cent during the early trade on Friday, hitting a new 52-week high, after the acquisition of DR Axion.
In an exchange filing, Craftsman Automation said that it has entered into a definitive agreement to acquire 8,57,65,631 equity shares or 76 per cent paid up equity share capital of DR Axion India Private Limited (DRAIPL) for a consideration of Rs 375 crore.
“Upon the completion of the transaction, DR Axion India will be a subsidiary of the company,” the company’s regulatory filing added. The acquisition is expected to be completed before March 31, 2023.
Following the announcement, Craftsman Automation shares jumped over 10 per cent to Rs 3,592, its new 52-week high. However, the stock was trading at Rs 3,530 at 10.40 am. The scrip had settled at Rs 3,254.75 in the previous session.
Incorporated in December 2006, DRAIPL manufactures aluminium cylinder heads, a critical auto component used in passenger vehicles as outer shells of internal combustion engines in its single manufacturing facility in Chennai.
Also Read:┬аSensex, Nifty rise in the early trade; Bajaj Finance and Bajaj Finserv add 2%
The clientele of DRAIPL includes leading automobile original equipment manufacturers selling passenger vehicles in India. It had targeted a turnover of Rs 715.94 crore during FY22, the filing said.
Incorporated in 1986, Craftsman Automation is a leading engineering organization that is engaged in manufacturing precision components, which designs, develops, and manufactures a range of engineering products.
Listed in March 2021, shares of Craftsman have delivered a return of about 60 per cent in the last one year. The stock is more than 140 per cent up from its issue price of Rs 1,490.
The company is looking forward to benefit from PV light weighting led component requirements ahead as demand for EVs intensifies, said ICICI Securities in its recent report, where it has not rated the stock.
Being the second largest storage solutions player, with about 30 per cent market share, it is catering to industrial warehousing solutions and adding diversity to its automotive parts portfolio, the brokerage said.
