Avalon Technologies falls as promoter group sells 6% stake

Avalon Technologies Limited (AVALON) fell as much as 6% to ₹2,171 on September 30 after three promoter group entities sold a 6% stake through a block deal worth about ₹871 crore. Bhaskar Srinivasan, BBS Family Trust and KBS Family Trust sold 40.08 lakh shares, split equally between them. Their combined holding fell to 9.42% from 15.42%. Kotak Mahindra Mutual Fund bought 24.02 lakh shares, or 3.6% of the equity, for ₹521.4 crore. The shares changed hands at an average price of about ₹2,181. The company clarified that Chairman and Managing Director Kunhamed Bicha and his promoter group did not sell any shares. That matters, because the core management stake stays intact. A large domestic fund taking up more than half the block also points to institutional demand at these levels. This was a partial exit by one promoter group, not a broad promoter sell-off. Brokerage views on the stock are split. Nomura has a Buy rating with a ₹2,767 target, linked to Avalon's new joint venture with European electronics maker Zollner Elektronik. Kotak Institutional Equities keeps a Sell rating, despite raising its fair value by 79%. Investors should watch for any further selling once the sellers' 180-day lock-up ends, progress on the Zollner joint venture, and Q2 FY27 results. The key question is whether earnings growth can support the current valuation, which brokerages clearly disagree on. Disclosure: I do not hold any position in Avalon Technologies Limited. This post is for informational purposes only and is not investment advice.