Dabur India promoters sell 1% stake through block deal to finance ventures

Promoters of FMCG giant Dabur on Tuesday sold a 1 per cent stake through a block deal. According to an exchange filing, the Burman family — the promoters of Dabur — sold the shares through its Gyan Enterprises and Chowdry Associates.

“The purpose of doing this transaction is to raise funds for financing some ventures in the private hands of the Burman family,” the exchange filing said.

On Tuesday, Dabur’s stocks ended the session at Rs 579.8, a decline of 1.5 per cent. The company commands a market capitalisation of Rs 1.02 trillion. The promoters held a 67.24 per cent stake in the company as of September 2022.

The company recently announced its entry into the women’s personal hygiene space with the launch of Fem Ultra Care Sanitary Napkins.

On a year-to-date (YTD) basis, Dabur’s stock declined 0.1 per cent against a 20.6 per cent gain in the BSE FMCG index. Analysts attributed the tepid movement in the stock to a lack of positive surprises in the earnings.

“This year, there was a concern about rural growth. Dabur, to an extent, is dependent on the rural market. I won’t say it is a good buy at the current levels. Even at the FY24 estimated earnings, the current valuation is a bit stretched,” said Ambareesh Baliga, independent equity analyst.

G Chokkalingam, founder of Equinomics, said the valuations were slightly stretched for its earnings growth. “I am sceptical about the earnings growth in the next few quarters,” he said.