KPIT Tech Stock Jumps On Nod To Buy Germany’s Future Mobility
Shares of KPIT Technologies Ltd. rose the most in intra-day trading in more than a month after the company's board approved the acquisition of Germany's Future Mobility Solutions GmbH for 15.6-million euros (about Rs 135.1 crore).
The provider of software to automobile companies will initially buy 25% stake in Future Mobility, according to its exchange filing. The remaining shareholding will be acquired over three years.
The Indian company will gain majority control by the quarter ending March 2023 and complete the deal by three months through March 2024.
Future Mobility provides embedded software solutions to the auto sector and is also involved in developing autonomous driving, vehicle safety and integration and validation technology.
Incorporated in 2016, the German firm reported a turnover of 1.14 million euros (Rs 9.87 crore), 3.36 million euros (Rs 29.11 crore) and 4.30 million euros (Rs 37.25 crore) in calendar years 2018, 2019 and 2020, respectively.
KPIT Technologies expects the acquisition to add unique proprietary offerings in the autonomous driving domain and strengthen its presence in Germany.
Shares of KPIT Technologies rose nearly 6.6% to Rs 339.95 apiece as of 12:42 p.m. after the company approved the acquisition compared with 0.2% gains in Nifty 50.
Of the seven analysts tracking KPIT Technologies, five maintain ‘buy’, one each suggest ‘hold’ and ‘sell’, according to Bloomberg data. The average of 12-month target prices tracked by Bloomberg imply a downside of 0.9%
Trading volume on the stock was 2.5 times the 30-day average at mid-day on Wednesday.