Life Insurance Corporation of India (LIC) has reduced its stake in Exide Industries Limited (EXIDEIND) to 3.51%, from 5.51%. The reduction in stake was done through an open market sale of 1.70 crore shares.
The sale of shares by LIC was done at an average price of ₹179.84 per share, raising ₹31.56 crore for the insurer. The sale of shares was part of LIC’s plan to reduce its stake in companies that are not strategic to its business.
EXIDEIND is a leading manufacturer of batteries in India. The company has a market capitalization of ₹23,000 crore. The company’s shares have been on a downward trend in recent months, due to concerns about the global economic slowdown and the impact of the Russia-Ukraine war on the battery industry.
The sale of shares by LIC is not expected to have a significant impact on EXIDEIND’s stock price. However, the sale could be seen as a vote of no confidence by LIC in the company’s future prospects.
Reasons for the Stake Reduction
There are a number of reasons why LIC may have decided to reduce its stake in EXIDEIND. These reasons include:
- The global economic slowdown is expected to have a negative impact on the battery industry.
- The Russia-Ukraine war is also expected to have a negative impact on the battery industry.
- EXIDEIND’s shares have been on a downward trend in recent months.
- LIC may be looking to raise funds to invest in other businesses.
Impact of the Stake Reduction
The sale of shares by LIC is not expected to have a significant impact on EXIDEIND’s stock price. However, the sale could be seen as a vote of no confidence by LIC in the company’s future prospects.
The sale of shares could also lead to a change in control of the company. If LIC’s stake falls below 5%, it will no longer be required to make a mandatory open offer for the remaining shares. This could open the door for a takeover of the company by another investor.
Conclusion
The sale of shares by LIC is a significant development for EXIDEIND. The sale could have a number of implications for the company, including a change in control and a negative impact on its stock price. However, the sale is also an opportunity for the company to attract new investors and to improve its financial performance.