Amber extends rally after clarification on demerger; soars 31% in 5 days

Amber said it has several subsidiaries, and it evaluates various strategic opportunities for their growth and expansion in the ordinary course of biz including but not limited to various fund-raising

Shares of Amber Enterprises India soared 8 per cent to Rs 7,838.40 on the BSE in Thursday’s intra-day, extending its past four day’s upward movement. The stock witnessed high investor interest and heavy volumes in otherwise a subdued market. In five trading days, the stock price of household appliance company has rallied 31 per cent. 

 

At 02:49 PM; Amber was trading 7.5 per cent higher at Rs 7,799.05 on the BSE. In comparison, the BSE Sensex was almost unchanged at 78,479. The average trading volumes on the counter nearly doubled with a combined 3.93 million equity shares changing hands on the NSE and BSE.

 

 

Today’s up move in stock price of Amber came after the company said it has several subsidiaries, and it evaluates various strategic opportunities from time to time for their growth and expansion in the ordinary course of business including but not limited to various fund-raising activities.

 

Amber clarified on a news report that speculated on its plans to demerge its Electronics division. According to a report by CNBC TV 18, apart from the de-merger plans, Amber is also preparing to launch an IPO for its electronics division once the demerger process concludes.

 

"As on date, there is no such event that triggers the disclosure obligations under Regulation 30 of SEBI LODR Regulations. The Company will make appropriate disclosures regarding material events in the future as required under the SEBI LODR Regulations," Amber said.

 

On Friday, December 20, around 1 per cent of Amber’s equity, worth Rs 210 crore, changed hands. A total of 3,45,458 shares of the company changed hands at an average price of Rs 6,075, according to the NSE bulk deal data. While Ascent Investment Holdings sold the stake, buyers included Axis Mutual Fund (MF), Tata AIA Life Insurance Company, Mahindra Manulife MF, ICICI Prudential Life Insurance Company, Citigroup Global Markets Mauritius, and Goldman Sachs Investments Mauritius.

 

Amber group, a diversified manufacturing major, operates across three business verticals: consumer durables, electronics manufacturing services (EMS), and railway subsystems and mobility. The consumer durables vertical includes room air conditioner (AC) finished goods, room AC components (including motors), and non-room AC components.

 

The EMS business (comprising Iljin Electronics, Ever Electronics, and Ascent Circuits) provides solutions in telecommunications, automotive, smart energy meters, consumer electronics, appliances, hearables, wearables, and bare-board printed circuit boards (PCBs).

 

Amber also offers integrated solutions to rolling stock customers for HVAC (heating, ventilation, and air conditioning), doors, gangways, and pantry systems, serving the mobility sector, including Indian Railways, Metro, Regional Rapid Transit System, and buses.

 

So far in 2024, Amber’s share price has surged by 150 per cent on strong earnings, compared to the BSE Sensex’s 8.6 per cent rise during the same period.

 

In the last three months, the stock has soared 68 per cent after Amber’s consolidated revenues surged by 82 per cent year-on-year (Y-o-Y) to Rs 1,685 crore in September 2024 quarter (Q2FY25), while operating earnings before interest, tax, depreciation, and amortisation (Ebitda) grew 85 per cent Y-o-Y to Rs 120 crore.

 

The management said that the bare-board PCB market is expected to grow to nearly Rs 80,000 crore by 2029-30, up from the current Rs 32,000 crore, with a compound annual growth rate (CAGR) of 11-12 per cent. Eighty-five per cent of the market is currently supplied by imports, presenting sizeable growth potential for this division. "These initiatives unlock the opportunity to capture the domestic market and boost localisation," the management emphasised in its Q2 earnings conference call in October.