Swaraj Engines, Kirloskar Industries shares hit new 52-week highs, M&M surges nearly 5% intraday – key factors driving rally

Swaraj Engines, Mahindra and Mahindra, Kirloskar Industries share price: Shares of Swaraj Engines and Kirloskar Industries on Wednesday hit new 52-week highs of Rs 1,960 and Rs 1,810 per share on the BSE intraday, surging around 16 and 11 per cent, respectively. Mahindra & Mahindra (M&M) share price too gained nearly 5 per cent to Rs 1365.9 apiece during Wednesday's session.  

The surge in all these three stocks could be attributed to the announcement of M&M acquiring an extra 17.41 per cent stake in the Swaraj Engines for Rs 296 crore from Kirloskar Industries. The stock of Swaraj has surpassed its previous high of Rs 1,800, which it touched on October 19, 2021. 

M&M in its exchange filing said that the company proposes to acquire 2.11 million equity shares, constituting 17.41 per cent of the paid-up equity share capital, of SEL from Kirloskar Industries. It proposed to buy shares of Swaraj from Kirloskar at a price of Rs 1,400 apiece. 

With buying an additional stake in the diesel engine manufacturing company, M&M's stake in Swaraj would increase from 34.72 per cent to 52.13 per cent, consequently, becoming a subsidiary arm of M&M, it further said in a filing, adding that the transaction will be complete by September 30, 2022. 

Swaraj Engines is engaged in manufacturing and supplying diesel Engines in the range of 22 HP to above 65 HP for fitment in tractors to the farm equipment sector of M&M. The company is core to operations of the Farm Equipment Sector of M&M and the proposed transaction will fortify this core. 

Swaraj was promoted in 1985 by erstwhile Punjab Tractors Limited (since merged with Mahindra and Mahindra Limited) and Kirloskar Oil Engines Limited (name subsequently changed to Kirloskar Industries Limited). It is based in Mohali, Punjab, India. 

At around 1:35 PM, shares of Swaraj were trading over 10 per cent to Rs 1872 per share, Kirloskar was trading over 6 per cent to Rs 1736 per share and M&M was trading flat with a meager surge of 0.5 per cent to Rs 1309.65 per share as compared to 0.37 per cent fall in the S&P BSE Sensex.