Bata India slips 1% after nearly 3% equity changes hands via block deals

Shares of Bata India were down 1 per cent at Rs 1,856.65 on the BSE in Wednesday’s intra-day trade after nearly 3 per cent of the company's total equity changed hands via block deals.

The stock hit a high of Rs 1,898.40, after opening at Rs 1,880. In comparison, at 09:25 am, the S&P BSE Sensex was up 0.26 per cent at 55,709 points.

At 09:15 am; about 3.6 million equity shares representing 2.8 per cent of the total equity of Bata India had changed hands on the BSE, the exchange data showed. The name of the buyers and sellers were not ascertained immediately.

According to reports, the promoters were likely to sell around 2.8 per cent stake in the company via a block deal today to raise Rs 630 crore. The floor price of the deal was fixed at Rs 1,750 per share, a 7 per cent discount to Tuesday's closing price.

As on March 31, 2022, BATA (BN) B V, the promoter of Bata India, held 52.96 per cent stake in the company. Domestic mutual funds had 19.46 per cent holding, followed by individual shareholders (11.17 per cent), insurance companies (7.92 per cent) and foreign portfolio investors (6.66 per cent), shareholding pattern data shows.

Bata India is a major player in the Indian footwear market with a presence across men’s, women’s and kid’s footwear segment. It has a pan-India presence with the largest network of retail stores in the footwear industry with 1600+ stores.

Bata has devised new strategies that would aid in providing thrust to revenue growth. It is tweaking the product portfolio in favour of casual footwear that is experiencing higher demand. It is providing more visibility at stores for younger brands like Hush Puppies, Power and North Star.

Given its focus on newer collection, expansion through all channels and omni channel in particular, Bata India is well poised for the future. Its new business model and focus is reflected in the quick retrieval of business to pre pandemic levels and further growth, the management said.

In the last two quarters, the company has witnessed significant recovery in demand in the backdrop of improvement in consumer sentiments and deeper understanding of the pandemic, availability of vaccines and faster easing of restrictions.

"With scaling of above expansion/efficiency levers & rebound in consumer sentiments, we expect the momentum to continue towards pre-pandemic growth rate in the current quarter also as seen in quarter till date at 11 per cent ahead of pre-covid levels, gross margins sustaining at 58 per cent levels,” the management said, while announcing Q4 results on May 25, 2022.

Bata’s focus on cost reduction, omni channel, change in product mix (higher proportion of casual footwear) and calibrated expansion of retail network through asset light franchisee route is expected to be structurally positive. Brokerage ICICI Securities believes such strategic initiatives are expected to provide thrust to its operational performance on a sustained basis.