Lumax Auto Shares Fall for 3rd Day, Down 5% Despite Clarification

Lumax Auto Technologies condemns the dissemination of unauthorised information.

Shares of Lumax Auto Technologies (LATL) fell 5% to Rs 245.05 on the BSE in intraday trade on Wednesday, despite the company’s clarification on the circulation of unsolicited/unauthorised information related to its shares.

Shares of the auto parts and equipment company fell for a third straight day, down 9% for the period. In contrast, the S&P BSE Sensex was down 0.59% at 59,061 at 1:20 pm. The stock hit an all-time high of Rs 312 on September 15, 2022.

LATL stated that the company had received information that certain entities were disseminating unsolicited/unauthorised SMS/WhatsApp messages regarding the company’s stock.

“We strongly condemn the dissemination of such unsolicited/unauthorised messages. The dissemination of such posts is detrimental to investors and adversely affects the integrity of securities markets,” the company said in an exchange filing.”

Lumax-DK Jain Group is a leading player in the Indian automotive industry, offering a wide range of automotive solutions (Lighting modules, frame chassis, integrated plastic modules, gear levers, shift towers, power window switches, oxygen sensors, air intake systems, seat frame, urea tank, etc.).

With market leadership in automotive lighting solutions and gear levers, Lumax has been the preferred supplier to almost all leading OEMs in India.

Meanwhile, LATL shares soared 22% between February 20-27 after the company announced it would acquire a 75% stake in International Auto Components (IAC) India business for an enterprise value of Rs 587 crore.

LATL is expected to finance the acquisition value of approximately Rs 450 crore (75% stake) through debt. LATL will set up a special purpose vehicle (SPV) for the acquisition. The acquisition of IAC is expected to close by the end of March 2023. IAC India is reporting revenue of about Rs 470 crore in the nine months to FY23 with an EBITDA margin of 15%.

The acquisition of IAC is expected to benefit LATL’s business risk profile as most of IAC’s revenue comes from passenger vehicles (PV), which will complement Latel’s revenue profile that relies on two-wheelers (38% in 9M-FY23).

Get Daily Prediction & Stocks Tips On Your Mobile