Blackstone sells entire 20.5% stake in Sona BLW; stock tanks nearly 7%

HDFC Bank, Singapore's GIC and Societe Generale among buyers of about 120 mn shares; analysts say Blackstone exit removes a key overhang for the Sona stock

Private equity major Blackstone sold its entire 20.5 per cent stake in Sona BLW Precision Forgings on Monday. Shares of Sona dropped nearly 7 per cent to close at Rs 405.8.

Blackstone affiliate firm Singapore VII Topco III sold about 120 million shares at Rs 410 each to mop up Rs 4,917 crore.

Among the buyers were HDFC Bank, Singapore’s GIC and Societe Generale.

Blackstone has set a floor price of Rs 400 per share for the transaction.

Since Sona’s listing in June 2021, Blackstone has sold shares in multiple tranches and also during the IPO.

In August 2022, Blackstone had sold 13.5 per cent stake. Analysts said Blackstone’s exit removes a key overhang for the stock.

“The clean-up block sale here would lift the remaining overhang on Sona’s share price. That said, the stock isn’t exactly cheap and has been correcting over the past few months,” said analyst Provider Clarence Chu of Aequitas Research, who publishes on Smartkarma.

He said the stock currently trades at 62x its FY23 earnings estimates and 40.7 times its FY24 projected earnings.

Sona had issued shares in the IPO at Rs 291 per share. In December 2021, its stock had climbed to Rs 823. But in the past six months, it is down nearly 25 per cent.