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Follow on Google News | Stake sale news flow no longer a burden on Castrol India stockBy: Mergersindia Castrol Ltd, a wholly-owned subsidiary of BP Plc., sold 8.5% stake in Castrol India through a bulk deal. 42 million shares were sold at an average price of Rs.432.5 apiece on Tuesday. While it represents a premium of 2.4% to Monday's closing price, it's worth noting that the Castrol India stock had declined 4.5% on Monday. The stock decline on Monday is probably owing to fears that a deal may happen at a discount to market price. Compared to Friday's closing price, the deal happened at a discount of 2.2%. However, much to the relief of investors, the discount was lower than expected. On 19 May, Castrol had sold about 11.5% in Castrol India and reduced its stake from 71%. That deal had happened at a 5% discount to the previous day's closing price. Further, analysts say it helps that the reason for stake sale is not on account of issues related to Castrol but seems to be in keeping with BP's own plans. Also Read: BP sells 8.53% stake in Castrol India; shareholding at 51% now (http://www.livemint.com/ According to a Bloomberg report in May 2016, BP plans to sell $3 billion to $5 billion of assets this year as it seeks to pay down debt, maintain dividends and cover the cost of the 2010 Gulf of Mexico spill. Even as the Castrol India stock jumped on Tuesday, stake sale news flow has weighed on the stock, feel analysts. Its shares have underperformed the benchmark Sensex since the beginning of this calendar year. That is at a time when the company has delivered stellar results for two-quarters in a row. In fact, the June quarter net profit was its highest ever quarterly profit. Click below link to read in detail... https://mnacritique.mergersindia.com/ End
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