Craftsman Automation Shares Surge After Agreeing To Buy An Auto-Component Maker

Shares of Craftsman Automation Ltd. jumped after the company agreed to buy a 76% stake in auto-component maker DR Axion India Pvt.

The company will acquire 8.57 crore equity shares, representing 76% of the total equity share capital on a fully diluted basis, for Rs 375 crore. The acquisition will be completed before March 31.

DR Axion manufactures aluminum cylinder heads, a critical auto component used in PVs as an outer shell for internal combustion engines. It has a single manufacturing unit in Chennai that is involved in low-pressure and gravity-die-casting processes. The company reported a turnover of Rs 715.9 crore for fiscal 2022.

Shares of the company surged 10.78% to Rs 3,610 apiece as of 12 p.m., compared with a 0.03% decline in the benchmark Nifty 50. The total traded quantity so far in the day is 16.6 times the 30-day average volume.

Of the eight analysts tracking the company, seven maintains a ‘buy’, and one recommends ‘sell’, according to Bloomberg data. The 12-month consensus price target implies a downside of 5.4%.