Timken India falls over 11% after promoter proposes to sell Rs 1,890 crore worth of shares

Shares of Timken India, the bearings and power transmission products maker, plunged as much as 11 per cent in the morning deals to touch the day’s low of Rs 3,100.3 a share on the BSE. The stock slipped after promoters of Timken Singapore Pte Ltd, the parent company of Timken India, proposed to sell 0.63 crore shares of the company through a block deal.

At 11:30 AM, Timken India’s stock was trading at Rs 3247.05 apiece, down 6.84 per cent. The stock has been trading in the red for the second straight session. The scrip made its 52-week low level at Rs 2,245.10 apiece on June 22, 2022.

The floor price of the stake sale to institutional investors by Timken Singapore is set at Rs 3,000 a share, a 13.9 per cent discount from Monday's closing level. The block deal is worth Rs 1,890 crore ($23 .1 crore). Timken Singapore owned a 67.8 per cent stake in the Indian unit as of March 31, as per Zee Business research.

What should investors do?

JM Financial has initiated a ‘buy’ on shares of Timken India for a target price of Rs 3,700 apiece, which translates to an upside of 13.8 per cent from the current market price.

The brokerage believes that earnings growth is expected to accelerate post-FY25 as a new roller-bearing facility is commissioned.

"We expect the company to gain from a cyclical recovery over FY23–35 in its existing domestic segments i.e., commercial vehicles and railways," the brokerage report said.

Timken share price: Past performance

Year to date (YTD), the stock has gained over 1 per cent against the Nifty50’s rise of over 2 per cent. In a year, the stock has surged nearly 40 per cent against the headline index’s rise of over 21 per cent.

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