Welspun Corp Ltd. witnessed a dip in its share price today following a substantial block deal worth ₹1,433.44 crore. The transaction involved the sale of 6.3 million shares by MD & CEO Vipul Shah and promoter group entity Welspun Investments And Commercials Ltd.
The shares changed hands at ₹2,275.30 apiece, marking a 2.99 percent discount compared to Tuesday's closing price of ₹2,345.50. This significant sale represents 2.4 percent of Welspun Corp's total outstanding shares. The floor price for the deal was set at ₹2,250 per share, a 4.1 percent discount from the previous day's closing on NSE. IIFL Capital Services acted as the sole placement agent for the transaction.
Context of the Block Deal
The block deal comes at a time when Welspun Corp shares have seen a robust rally, surging 43 percent over the past month. Additionally, the company recently secured a substantial $1.8 billion order in the United States, significantly boosting its order book.
Despite the positive news of the US order, the selling by key stakeholders led to a market reaction, with shares falling 1.21 percent to ₹2,319.30 apiece on the BSE.
Analyst Outlook and Future Projections
Brokerage firms have offered varied outlooks on Welspun Corp following these developments. Nuvama had set a revised target price of ₹2,437, which the stock was nearing before the block deal. Other firms like Investec maintain a 'Buy' rating with a target of ₹2,878, while Equirus Securities has an even higher target of ₹3,107.
Systematix, which maintained a 'Hold' rating, highlighted that the company's $1.8 billion US order has dramatically strengthened its order book from ₹25,750 crore to ₹42,100 crore, ensuring revenue visibility through FY29. The brokerage anticipates the US business to be a primary earnings driver, supported by capacity expansion and sustained demand.
Systematix also revised its FY27 and FY28 EBITDA estimates upwards by 10-11 percent and PAT estimates by 8-10 percent. They project Welspun Corp to achieve a revenue, EBITDA, and PAT CAGR of 26 percent, 28 percent, and 29 percent, respectively, over FY26-FY29E, revising their target price to ₹2,363 per share.
Equirus Securities noted on August 23 that the large order provides substantial multi-year revenue visibility. While specific EBITDA guidance for the long-term order wasn't given, management indicated attractive US operating margins. The company aims for approximately ₹50 billion in EBITDA over the next 3-4 years, driven by strong US demand, expected Middle East demand, and timely capacity expansion.