Shares of Eimco Elecon (India) Ltd. experienced a sharp decline of 15.00% in Wednesday's trading session following a significant announcement by the company's promoter group. Tamrock Great Britain Holdings Limited, a key shareholder holding a 24.68% stake in the company, has revealed plans for a substantial stake sale through an Offer for Sale (OFS) mechanism.

Offer Details

Tamrock Great Britain Holdings Limited intends to sell up to 7,23,875 equity shares, representing approximately 12.55% of the total issued and paid-up equity share capital of Eimco Elecon. The base offer size accounts for about 12.55% of Tamrock's current holding in the company.

Oversubscription Option

In addition to the base offer, Tamrock has included an oversubscription option for up to 7,00,000 additional shares, equivalent to approximately 12.14% of the company's total issued and paid-up equity share capital. If the oversubscription option is fully exercised, the total stake sale could amount to 14,23,875 shares, representing Tamrock's entire 24.68% holding in Eimco Elecon.

Offer Schedule

The OFS is scheduled to take place over two trading days:

• September 24, 2025 (T Day): Open for non-retail investors only
• September 25, 2025 (T+1 Day): Open for retail investors and non-retail investors who choose to carry forward their unallotted bids from T Day

Floor Price and Market Reaction

The floor price for the offer has been set at ₹1,400.00 per share, representing a significant discount of 31.00% compared to the previous day's closing price. This steep discount likely contributed to the 15.00% drop in Eimco Elecon's share price during Wednesday's trading session.

Retail Investor Participation

The OFS includes a provision for retail investors, with 10% of the offer shares reserved for this category. Retail investors, defined as individual investors placing bids for shares valued at not more than ₹200,000.00, will be allowed to participate on T+1 Day.

Implications

This substantial stake sale by a promoter group entity could potentially lead to a significant change in the ownership structure of Eimco Elecon (India) Ltd. The market's initial reaction, as evidenced by the sharp decline in share price, suggests that investors are reassessing the company's valuation in light of this development.

About Eimco Elecon (India) Ltd.

Eimco Elecon (India) Ltd., established in 1974, is a leading manufacturer of underground mining machinery. The company produces a wide range of equipment including load haul dumpers, side discharge loaders, and other mining and tunneling machinery.

Eimco Elecon (India) Limited , a leading manufacturer of underground mining equipment and construction machinery, has released its Q1 investor presentation, revealing a mixed financial performance and a substantial reduction in its order book.

Financial Performance

The company reported a slight decline in revenue for Q1, with figures dropping to INR 68.00 crores, down 3.1% from INR 70.00 crores in the same quarter of the previous fiscal year. The decline in revenue was accompanied by a more significant decrease in profitability metrics:

Despite the overall decline, it's worth noting that the company managed to maintain a relatively stable profit after tax (PAT) margin, which saw a slight increase of 20 basis points.

Order Book Concerns

Perhaps the most striking aspect of the report is the significant reduction in Eimco Elecon's open order book. As of the end of the quarter, the order book stood at INR 39.00 crores, marking a substantial 68.8% decrease from INR 125.00 crores in the same period last year. This sharp decline could potentially impact the company's future revenue streams and may be a cause for concern among investors.

Company Overview

Eimco Elecon (India) Limited, with its 51 years of experience, operates from its manufacturing facility in Gujarat. The company specializes in producing underground mining equipment and construction machinery. It boasts a network of sales and service centers across India, catering primarily to clients in the coal mining and construction sectors.

Quarterly Performance Highlights

• Gross Profit: Improved to INR 37.00 crores in Q1 from INR 34.00 crores in Q1 of the previous year, with the gross profit margin expanding to 55.0% from 49.5%.
• Other Income: Increased to INR 8.00 crores from INR 5.00 crores in the same quarter last year.
• Earnings Per Share (EPS): Slightly decreased to INR 25.11 from INR 25.63 in Q1 of the previous year.

Outlook

While Eimco Elecon has managed to maintain relatively stable profitability in the face of declining revenue, the significant reduction in its order book may pose challenges for future growth. The company's ability to secure new orders and expand its client base could be crucial in the coming quarters to offset the current decline in its order book.