InvestorQ : Why has the shares of Wabco fallen so sharply by 10%?
Juvina Maggie made post

Why has the shares of Wabco fallen so sharply by 10%?

Deepa Salunkhe answered.
9 months ago

Wabco India stock slumped 10% to touch a price of Rs.5,510 on the BSE. The price fall was triggered after the promoters sold part of their stake through offer-for-sale or OFS route. In fact, the prices fell because the floor price for the OFS was set at Rs.5,450 at a 11% discount to the closing price of Rs.6,102. The OFS is open for non-retail investors on Thursday and for retail investors on Friday.

In the OFS, the promoter ZF International UK will offload 18.10%, which will consist of 9.05% as base issue and 9.05% as Greenshoe option. Currently, the promoters Wabco Asia ZF UK jointly hold 93.11% of the company and they need to bring it down to below 75% as per SEBI regulations. Wabco is into auto components and is extremely positive on the auto space post the new vehicle scrappage policy.

The FAME-II scheme of the Indian government resulted in an increase in adoption of electric buses across India and has got permissions to make significant budget allocation to the Ministry of Urban Development to support STUs in procuring Buses with other alternate fuels like CNG, Biofuel etc. This is expected to revive the demand for commercial vehicle, a segment that has been extremely quiet in the midst of the economic slowdown.