Information technology (IT) services company Cyient announced on Tuesday, August 20, that its board has approved the sale of a 14.5 percent stake in its subsidiary, Cyient DLM Ltd, through a block deal. The company plans to finalize the stake sale on August 21, 2024.
In a regulatory filing, Cyient stated, “The Board of Directors of the company, at its meeting held today, August 20, 2024 (Tuesday), has considered and approved the sale of up to 1.14 crore equity shares, representing approximately 14.5 percent of the total outstanding equity shareholding of its subsidiary, Cyient DLM Ltd, by way of a share sale using the block deal window mechanism provided by the stock exchanges.”
Cyient expects to complete the sale by August 21, 2024, or on a mutually agreed date between the company and the buyer. The IT services firm plans to use the proceeds from the sale for capital requirements and debt repayment.
Cyient recently reported a decline in first-quarter profit, impacted by a greater-than-expected delay in project execution. The company also experienced a 0.6 percent revenue drop due to challenges in the railway industry and its connectivity segment. Tech firms have faced sluggish demand over the past fiscal year as clients focus on cutting costs amid high inflation and interest rates.
However, analysts note that technology companies, which earn a significant portion of their revenue from the US, could benefit from increased client spending due to anticipated interest rate cuts in the world’s largest economy later this year. On Tuesday, Cyient’s shares closed 6.13 percent higher at ₹1,934.05 apiece on the BSE.
