Bharat Forge stock rises 2% on plan to consolidate its EV biz

Shares of Bharat Forge rose over 2% in opening trade on Tuesday after the forging company unveiled plan to restructure its electric vehicles business for a better strategic alignment. In a post market release, the firm has announced undertaking of e-mobility business initiatives under Kalyani Powertrain Ltd (KPL), its wholly-owned subsidiary.

Cheering the news, shares of Bharat Forge opened higher and gained as much as 2.5% to hit a high of ₹639.8, against the previous closing price of ₹624.4 on the BSE. In the first hour of trade so far, as many as 0.11 lakh shares worth ₹66.36 crore changed hands over the counter on the BSE, as compared to the two-week average volume of 0.85 lakh stocks. The market capitalisation of the largecap stock climbed to ₹29,475.52 crore. In comparision, the BSE benchmark Sensex was trading 623 points higher at 52,220 levels, driven by broad-based buying amid firm global cues.

Technically, the stock moves in a bearish range, trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. Underperforming the benchmark index, the stock has fallen 3% in a week, 8% over a month, and 11% since the beginning of the calendar year 2022. In the last one year, the stock has given negative returns of 13%, while it has dropped 6% in the past six months.

Bharat Forge in an exchange filing on Monday says it has approved the transfer of its stake in Refu Drive GmbH (Refu), a joint venture, to KPL, subject to requisite approval. “In order to house all the EV investments of the company under one entity, the 'Investment Committee - Strategic Business' of the Company at its meeting held on June 20, 2022, has approved the transfer of the Company's stake in Refu Drive GmbH (Refu), joint venture (JV) company, to KPL subject to receipt of necessary approval from regulatory authorities,” says the statement.

The current stake in Refu was acquired by the company by entering into a joint venture agreement with Refu Electronik GmbH, Germany and its affiliates. Bharat Forge has approved the transfer of the company's stake in Refu to KPL in consideration of subscription of equity shares of the KPL by the company. Through this transfer of shares, Refu will become an Associate Company of KPL.

Refu is in the business of development, manufacturing and selling on board controllers and components mainly - drives, invertors, converters (including AC/DC) for all e-mobility vehicles such as hybrid and electric 2 and 3-wheelers, cars, and commercial vehicles.