Bulk Deal Alert: Ace Investor Vijay Kedia Invests Rs 25 Crores in this EV Stock

Indian markets are gearing up cautiously as investors await key inflation data from both the US and India, which could steer market trends and investment decisions.

Anticipating a modest rise in Indian shares, traders are adopting a cautious approach ahead of these significant reports. The US Consumer Price Index (CPI), set to be released on Wednesday, holds particular importance for the Federal Reserve's interest rate policy and could affect foreign investment flows into markets like India.

At the same time, India's CPI for November is projected to ease to 5.53%, shaping the Reserve Bank of India's rate decisions.

Amid this many investors are on the lookout for new investment ideas.

For such investors, ace investor Vijay Kedia has added a new stock to his portfolio.

Who is Vijay Kedia?

Vijay Kishanlal Kedia is an Indian investor and trader based out of Mumbai. His company - Kedia Securities - is the largest shareholder (after the promoter) in several listed companies.

Kedia has been involved in the Indian stock market since the age of 19. He has been described by many as a 'market master'.

To point out a few of his investments, he bought ACC at Rs 300 in 1992-93 and sold the stock around Rs 3,000 within a year and a half.

During the years 2004 and 2005, he picked several multibagger stocks which gave returns of over 1,000% in the next 10-12 years. A few of these stocks were Atul Auto, Aegis Logistics, and Cera Sanitary.

Which Stock did Vijay Kedia Buy?

The stock in question is Greaves Cotton.

Greaves Cotton manufactures internal combustion engines, power generation equipment, and power transmission systems.

According to the data available on the exchanges, Vijay Kedia bought 1.2 million (m) Greaves Cotton shares in a bulk deal executed on Monday, 9 December 2024.

He bought these shares in the name of his company, Kedia Securities, paying Rs 208.87 per share. So, Vijay Kedia made a whopping investment of Rs 250.6 m.

According to Greaves Cotton Limited's shareholding pattern for the July to September 2024 quarter, neither Vijay Kedia nor Kedia Securities appears on the list of individual company shareholders.

This means perhaps he had a minimal stake already and has now decided to double down, or he could have bought the entire stake recently.

While we don't know the exact reasons why Kedia added Greaves Cotton, here are some we can guess.

#1 Greaves Electric Mobility IPO Approved

Greaves Cotton's board on 1 December 2024 approved the Initial Public Offering (IPO) of its subsidiary, Greaves Electric Mobility.

Greaves Electric Mobility, part of Greaves Cotton Ltd., has been operating in India's electric vehicle space for over 16 years, as per the company website.

The company focuses on designing and manufacturing electric vehicles, with the goal of providing affordable, sustainable, and smart mobility solutions.

The IPO will include a fresh issue of equity shares and an offer for sale by existing shareholders.

GEML plans to raise capital through the fresh issue of shares, while certain existing shareholders will offer their equity as part of the sale. The final details, including the size of the IPO, pricing, and the list of participants in the offer for sale, will be disclosed in due course.

These details will be finalised in consultation with the appointed book-running lead managers.

In September, Greaves Cotton's electric mobility arm, Greaves Electric Mobility, secured the Heavy Industries Ministry's nod for incentives under the Union Government's Electric Mobility Promotion Scheme (EMPS) 2024.

Greaves Electric Mobility said its three-wheeler business through its subsidiary is already eligible for such incentives under the scheme.

This approval of the subsidiary's IPO can be one of the reasons why ace investor Vijay Kedia might have bought the counter.

#2 Fuel-Agnostic Vision and Revenue Aspirations

Greaves Cotton's transformation from a diesel engine manufacturer to a fuel-agnostic mobility solutions provider might also have captured the ace investor's attention.

The company has set an ambitious goal of achieving Rs 150 billion (bn) in revenue by 2030, leveraging a combination of organic growth and strategic acquisitions.

Over the past five years, Greaves has diversified its revenue streams and built a digitally integrated ecosystem that connects consumers, business partners, and service providers across the mobility value chain.

Despite external challenges, this forward-looking approach positions the company as a leader in India's evolving mobility landscape.

These strategic initiatives, coupled with a strong foundation for future growth, can be another key reason behind Kedia's investment in Greaves Cotton.

A Look at the Financials

For the September 2024 quarter, Greaves Cotton's revenue fell 3% YoY to Rs 7.1 bn from Rs 7.3 bn. It reported a net loss of Rs 140 m in the September 2024 quarter, a significant improvement from Rs 3.7 bn loss in the same quarter last year.

Meanwhile, EBITDA stood at Rs 220 m, down 52.2%, with margins dropping 3.2% to 3.1% from 6.3% in the September 2024 quarter.

For FY24, it recorded a 2.5% YoY decline in revenue to Rs 26,332 m while it recorded a net loss of Rs 3,673 m.

Greaves Cotton Financial Snapshot (FY22-24)

(Rs m, Consolidated)	FY22	FY23	FY24
Revenue	17,097.00	26,995.00	26,332.00
Revenue Growth (%)	13.9	57.9	(-2.5)
Net Profit	(-353.0)	698	(-3,673.0)
Net Profit Margin (%)	(-2.1)	2.6	(-13.9)
Return on Equity (%)	(-4.7)	4.4	(-25.9)

Source: Equitymaster

Over the past three years, its revenue saw a compound annual growth rate (CAGR) growth of 20.6%, while is yet to recover.

Greaves Cotton has maintained a return on equity (RoE) averaging to a healthy 1.5%.

What Next?

Looking ahead, Greaves Cotton's lending subsidiary, Evfin, has ambitious plans to scale its operations significantly. Over the next five years, Evfin aims to finance a portfolio of 500,000 electric two-wheelers, marking a substantial leap from its current base of approximately 12,000 units.

This expansion aligns closely with India's commitment to cleaner transportation solutions. Evfin plans to capture up to 80% of the EV two-wheeler financing market by expanding its presence to 150-160 cities, compared to the 42 cities it currently serves.

The timing is opportune, as India's EV market is witnessing rapid growth. Currently, electric vehicles account for approximately 8% of all two-wheeler sales, a number poised to rise with the ongoing development of infrastructure and increasing consumer adoption, this is further set to bolster Greaves Cotton's position in India.

However, before making any investment decisions, it is crucial to assess the company's financials and corporate governance practices.

How Shares of Greaves Cotton have Performed Recently

The share price of Greaves Cotton has gained by 36% in the past one month.

Over the past one year, shares of the company have rallied 78%.

The company touched its 52-week high of Rs 249 on 10 December 2024 and its 52-week low of Rs 112.1 on 4 June 2024.

About the Company

Greaves Cotton Limited was established in 1922 and is a leading Indian engineering company providing end-to-end energy solutions.

It manufactures cleantech powertrain solutions for CNG, petrol, diesel engines, gensets, farm equipment, e-mobility, and aftermarket services.

The company operates in four segments, which include engines, electric mobility, cables & control levers, and others. Its electric mobility portfolio includes two and three-wheelers like the Ampere Primus and Greaves ELP.

Greaves is committed to sustainable mobility and operates subsidiaries like Greaves Finance Limited and Greaves Technologies

You can also compare Greaves Cotton with its peers.

Greaves Cotton vs Cummins India

Greaves Cotton vs Swaraj Engines

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