Avalon Technologies Promoters Sell 6% Stake in Rs 871 Crore Deal

Avalon Technologies experienced a significant bulk share transaction on the Bombay Stock Exchange (BSE) on Wednesday, involving promoter entities offloading a total of 40.08 lakh shares equivalent to 6% of the company’s equity. The combined value of these shares was approximately Rs 870.6 crore, indicating a substantial shift in ownership.

Kotak Mahindra Mutual Fund emerged as the primary buyer in this deal, acquiring 24.02 lakh shares, which represent around a 3.6% stake in Avalon Technologies. The purchase price stood at Rs 2,171 per share, summing up to Rs 521.38 crore, as detailed in the BSE bulk-deal disclosures.

The sellers in this transaction comprised three entities closely associated with the promoters. KBS Family Trust sold 13.36 lakh shares at Rs 2,173.35 each. Meanwhile, Bhaskar Srinivasan and BBS Family Trust offloaded 13.36 lakh shares apiece, at prices of Rs 2,171.03 and Rs 2,171.04 respectively. Collectively, the three transactions amounted to Rs 870.61 crore.

Despite the deal, Avalon Technologies’ stock price closed slightly lower at Rs 2,294.50 on Wednesday, down 0.49% from its previous close of Rs 2,305.75. During the trading session, the stock fluctuated between Rs 2,171 and Rs 2,316.55. The company’s market capitalization at day’s end was recorded at Rs 15,346.14 crore.

According to the latest data available for the quarter ending June, promoter entities held a combined 44.39% stake in Avalon Technologies. Among them, Bhaskar Srinivasan controlled 9.39%, while both BBS Family Trust and KBS Family Trust owned 3.02% each. The remaining 55.61% of shares are held by public investors.

Earlier this month, Japanese brokerage firm Nomura reiterated its positive outlook on Avalon Technologies by maintaining a Buy rating and raising its target price from Rs 2,211 to Rs 2,767. This optimism coincides with Avalon’s formation of a joint venture with Zollner Elektronik AG, an unlisted European electronics manufacturing services (EMS) company.

The joint venture focuses on printed circuit board assembly (PCBA), box-build, and system integration manufacturing operations within India. It aims to service clients across multiple sectors, including healthcare and life sciences, test and measurement, railways, and other industrial segments.

Under the agreement, Zollner will initially hold a 51% stake in the new venture. Avalon has the option to increase its ownership by 2% after three years of commercial production, which would shift majority control to Avalon with a 51% share, subject to certain conditions.

Nomura highlighted that the partnership could expand Avalon’s global customer base, enhance its footprint in Europe, and open doors to two highly specialized verticals: healthcare and life sciences, and test and measurement. These sectors are known for their complex manufacturing needs and long product lifecycles.

The brokerage also retained a target price-to-earnings (P/E) multiple of 45 times and extended its valuation horizon to December 2027 from the earlier September 2027 forecast. This adjustment contributed to the higher target price. At present, Avalon’s shares trade at approximately 35 times its forecasted earnings per share for the fiscal year 2029.

Avalon Technologies is an established player in the electronic manufacturing services field, with over 25 years of experience. The company offers comprehensive box-build solutions that cover everything from printed circuit board design and assembly to the final full system assembly of electronic products. It operates manufacturing facilities both in India and the United States and follows a global delivery model to serve a diverse customer base.

The company’s clientele spans multiple industries, including clean energy, transportation, industrial equipment, communications, and medical devices. This diversified portfolio provides Avalon with resilience and growth opportunities in various high-tech sectors.

Disclaimer: This article was authored by Kumar Gaurav, who is not a SEBI-registered Research Analyst or Investment Adviser. Neither Gaurav nor his relatives hold any financial interest in Avalon Technologies or related entities as of the publication date. The views expressed herein reflect those of the cited SEBI-registered research analysts and brokerages and should not be mistaken for official recommendations from The Economic Times Digital or its journalists. Readers are encouraged to consult original research reports and exercise their own judgment when making investment decisions.