1 day ago
Solar Industries Shares Slide as Omnia Acquisition Draws Scrutiny
Solar Industries is buying a South African company called Omnia Holdings.
The deal is worth about Rs 12,951 crore.
Solar plans to pay for the purchase with cash, and possibly with help from borrowing.
The deal still needs government approvals and approval from Omnia’s shareholders.
Solar says the purchase could help it grow its mining and explosives business around the world.
Its shares fell sharply, including a 4% fall in the latest trading session.
DAM Capital still believes the deal could be very important for Solar and kept a buy rating.
The brokerage said investors should continue watching Solar’s agriculture and chemicals business.
Solar Industries shares fell 4% to Rs 18,480, after reportedly plunging 17% over two days.
Its subsidiary Solar SA Investments will acquire South Africa-based Omnia Holdings for approximately US$1.355 billion, or Rs 12,951 crore.
The all-cash transaction requires regulatory clearances and approval from Omnia shareholders.
DAM Capital valued the deal at about 7.9 times EV/EBITDA and retained a buy rating with a Rs 22,000 target price.
The acquisition is expected to close by mid-2027 and expand Solar Industries’ commercial-explosives and mining operations.
- Who
- Solar Industries India Limited, through its wholly owned step-down subsidiary Solar SA Investments Proprietary Limited, and Omnia Holdings Limited.
- What
- Solar SA Investments will acquire all outstanding Omnia shares in an all-cash transaction valued at approximately US$1.355 billion, or Rs 12,951 crore.
- Where
- Omnia is headquartered in South Africa and listed on the Johannesburg Stock Exchange.
- When
- The transaction is expected to close by mid-2027, subject to conditions and approvals.
- Why
- The acquisition is intended to strengthen Solar Industries’ global commercial-explosives and mining presence and generate operational and cost synergies.
Market Concerns
DAM Capital Assessment
Share-price reaction
Market Concerns
Solar Industries shares fell sharply, with the stock reportedly down 17% over two days and 4% in the latest session.
DAM Capital Assessment
DAM Capital maintained a buy rating and assigned a Rs 22,000 target price.
Acquisition impact
Market Concerns
The deal’s size and its expected funding through internal accruals and debt may be a concern for investors, while the agriculture and chemicals business remains an earnings monitorable.
DAM Capital Assessment
DAM Capital described the acquisition as potentially transformational, citing stronger global mining and commercial-explosives operations and expected operational and cost synergies.
Key facts
- Offer value
- Approximately US$1.355 billion, or Rs 12,951 crore.
- Buyer
- Solar SA Investments Proprietary Limited, a wholly owned step-down subsidiary of Solar Industries India Limited.
- Target
- Omnia Holdings Limited, a South African industrial-explosives and fertiliser company.
- Share-price move
- Solar Industries shares fell 4% to Rs 18,480 in the reported session, versus a previous close of Rs 19,250.
- Deal valuation
- DAM Capital said the transaction is valued at approximately 7.9 times EV/EBITDA.
- Expected closing
- Mid-2027, subject to customary closing conditions, regulatory approvals and Omnia shareholder approval.
- DAM Capital view
- Buy rating with a target price of Rs 22,000.
Quotes
Solar Industries
Indian manufacturer of industrial explosives and defence products
“Solar SA Investments Proprietary Limited (“Solar SA”) will acquire all outstanding shares of Omnia in an all-cash transaction for a consideration of approximately US$1.355 billion (?12,951 crores), subject to customary closing conditions, including receipt of required regulatory approvals and approval by Omnia shareholders ("Offer"),”
businesstoday.in
Sources
Related news
Solar Industries Plans Revenue Surge After Omnia Acquisition
Solar Industries Shares Fall After $1.355 Billion Omnia Deal
Solar Industries to Acquire South Africa’s Omnia for $1.36 Billion
Goldman Sachs raises Solar Industries target on proposed Omnia acquisition
Solar Industries India Expands South Africa Presence Through Omnia Acquisition
Solar, BEL and CG Power Shares Slide Amid Market Sell-Off
Ninth Woman Found Dead as South Africa Police Seek Answers
Labuschagne Defends Australia No. 3 Test Position Amid Scrutiny
From Explosives Trader to Global Defence Manufacturing Titan
Laura Wolvaardt Sets Women’s T20I Calendar-Year Scoring Record
India Rejects Misleading Claims Leaders Fell Ill After BRICS Summit
