Diamond Power Shares Drop 6% After Promoter’s Stake Sale Announcement

Diamond Power Shares Drop 6% After Promoter’s Stake Sale Announcement

Diamond Power Infrastructure’s promoters intend to sell close to 6% of their holdings, causing a significant drop in the company’s share value as part of compliance with regulatory ownership requirements.

Promoter Stake Sale Triggers Sharp Stock Decline

Diamond Power Infrastructure Limited, a small-cap power transmission company, witnessed its shares tumble by 6% following the announcement that its promoters intend to divest a 5.98% stake via an Offer for Sale (OFS). The company, known for manufacturing a variety of power transmission products such as aluminum and alloy rods, conductors, medium voltage cables, and transmission towers, serves key sectors like energy infrastructure and renewable energy.

On the day of the announcement, the stock reached an intraday low of ₹101.60 per share, dipping significantly from the previous day’s close of ₹107.70. Despite a slight recovery, the share was trading around ₹109.10 at the time of reporting, reflecting market volatility driven by the planned stake sale.

Details of the Offer for Sale

Monarch Infraparks Private Limited and GSEC Limited, the promoters, have announced plans to divest as many as 31.5 million equity shares, accounting for nearly 5.98% of the overall stake in Diamond Power. The sale will take place in two phases — 3.99% or 2.1 crore shares will be offered to non-retail investors on June 5, 2025, followed by an offer to retail investors and others for the remaining 1.99% (1.05 crore shares) on June 6, 2025.

This move is primarily to comply with Securities and Exchange Board of India (SEBI) guidelines mandating minimum public shareholding. The sale will be conducted through a designated exchange window, allowing for transparent transactions.

Company Profile and Market Position

Since its inception in 1970, Diamond Power Infrastructure Limited (DPIL) has grown to become a prominent force within India’s power transmission and distribution sector. Operating under the brand name “DICABS,” the company’s portfolio includes conductors, cables across low, high, and extra-high voltage ranges, and transmission towers. These products are essential in sectors spanning construction, industrial engineering, and increasingly, renewable energy.

The company’s reputation is built on decades of delivering quality and reliability to a growing customer base that depends on its robust transmission solutions.

Expansion Plans for 2025

Diamond Power is aggressively scaling its production capabilities to meet increasing demand. The company currently manufactures 41,300 kilometers of power cables annually, with plans to boost this capacity to 48,800 kilometers within the year. Furthermore, the firm plans to boost its footprint in wind power by setting up wind turbines with a combined capacity of 6.3 MW.

Capacity for aluminum and alloy rods, a core component in transmission infrastructure, is set to rise dramatically from 32,800 metric tons per annum (MTPA) to 122,800 MTPA. Similarly, production of Alloy and ASCR conductors will more than double from 50,500 MTPA to 150,500 MTPA. Transmission tower production, meanwhile, will maintain a steady capacity of 48,000 MTPA. These expansions highlight the company’s strategic intent to strengthen its foothold across power transmission segments.

Financial Performance Snapshot

In the latest quarter, Diamond Power Infrastructure demonstrated remarkable expansion in its revenue figures. Revenue soared from ₹134.41 crore in Q4 FY24 to ₹333.81 crore in Q4 FY25, marking an impressive 148.35% increase. However, profitability took a hit, with net profit declining by 46.88% from ₹14.42 crore to ₹7.66 crore over the same period.

Return metrics remain modest, with Return on Capital Employed (ROCE) at 3.17% and Return on Assets (ROA) at 1.93%. The firm reports earnings per share (EPS) of ₹0.65. These figures reflect both the ongoing investments and market challenges Diamond Power is navigating.

Final Thoughts

Diamond Power Infrastructure Limited’s recent promoter stake sale announcement has led to a notable dip in its share price, highlighting investor sensitivity to ownership changes. The company’s broad portfolio in power transmission products, combined with its expansion initiatives, positions it well for long-term growth, especially with the rising focus on infrastructure and renewable energy sectors.

However, the drop in profitability and modest returns signal the need for careful management of growth investments to sustain financial health. The OFS, driven by regulatory compliance, may introduce short-term stock pressure but also opens opportunities for increased public participation and liquidity.

Investors should monitor how Diamond Power balances its capacity expansion, profitability, and market perception as it advances its journey in the evolving power infrastructure landscape.

The image added is for representation purposes only