GMM Pfaudler is having quite a “freezing” day today. The stock, which had closed yesterday at Rs.5241.10, opened itself 10% lower at Rs.4717, getting frozen at its 10% LC of the day.
The market is disappointed with its Offer for Sale price (OFS) announced at Rs.3500/share , which is at a steep discount of 33% to yesterday’s closing price.
The promoters - Pfaudler Inc, Millars Machinery, and Urmi Patel are selling upto 25.70 lakh shares or 17.59% of the total equity, with an option to additionally sell 15.20 lakh or another 10.41% stake. So, 28% stake to be sold in all.
If the promoters do sell 28%, their stake in the company will come down from current 75% to 47%.
For non-retail investors, OFS will open today and for retail investors, it will open tomorrow, 23rd Sept.
Our Editor, Mr.SP Tulsian expects the neat term weakness to continue in the stock and might correct further to Rs.4500 levels. His advice to medium and long term investors - stay put as it remains a fundamentally strong stock.