CG Power Shares Drop 3% After Block Deal

Shares of CG Power and Industrial Solutions dropped by 3% on Tuesday following a significant block deal on the exchanges.

This deal involved the transfer of a 0.5% stake in the company. Market sources indicate that the block deal was likely executed at a floor price, offering a 2-3% discount to the stock's previous close.

Following the transaction, CG Power shares were trading at Rs 645.50 on the National Stock Exchange (NSE).

The block deal is speculated to involve a foreign institutional investor (FII) as the seller, which contributed to the decline in share price. The nature of the seller and the discount applied to the block deal price likely added downward pressure on the stock.

This price movement comes shortly after CG Power reported its fourth-quarter earnings for FY24. The company saw a notable 15 percent increase in its consolidated revenue, which rose to Rs 2,191 crore from Rs 1,902 crore in the same quarter of the previous year. Despite this revenue growth, CG Power experienced a decline in profitability.

For the March quarter, the company reported a consolidated net profit of Rs 233.8 crore, marking a 10 percent decrease compared to the Rs 260 crore net profit recorded in the corresponding period last year. The decline in net profit was attributed primarily to higher operating expenses, which offset the gains made in revenue.

Investors have shown concern over the mixed financial performance and the block deal, leading to a cautious approach in trading CG Power shares. The recent developments have stirred market sentiment, reflecting the delicate balance between growth prospects and cost management that the company faces.