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SEPC is making one of its biggest moves yet, but investors weren't impressed.
The engineering and infrastructure company's shares fell on Wednesday, July 8, even after its board approved the acquisition of up to a 90% stake in UAE-based Avenir International Engineers and Consultants LLC.
Avenir International Engineers and Consultants LLC, based in Abu Dhabi, is an engineering and design consultancy that primarily serves the oil & gas and civil infrastructure sectors in the UAE.
One of its biggest strengths is that it is already qualified to work with the Abu Dhabi National Oil Company (ADNOC), one of the world's largest oil producers.
The deal, explained: the company plans to acquire up to 90% of Avenir through a share swap, which means it will not pay cash for the deal. Instead, the company will issue 153 crore new equity shares to Avenir's shareholders through a preferential allotment at an issue price of ₹10 per share, taking the total transaction value to ₹1,530 crore. The acquisition is expected to be completed by December 2026.
Why it matters: the acquisition strengthens the company's presence in the oil and gas engineering sector while giving it access to Avenir's established qualifications with ADNOC, making it easier to bid for large energy projects in the UAE.
The deal also expands SEPC's footprint across West Asia and the wider Gulf Cooperation Council (GCC) region.
So why did the stock still fall: despite the strategic rationale, investors remained cautious.
One major reason is share dilution. Since SEPC is issuing 153 crore new shares to complete the acquisition, the total number of shares outstanding will increase significantly. That means existing shareholders will own a smaller percentage of the company after the deal, which often puts pressure on stock prices in the short term.
Broader market conditions haven't helped either. Foreign Institutional Investors (FIIs) have been pulling money out of Indian equities amid global uncertainty. Factors such as the US reciprocal tariff announcement, which imposed a 26% levy on Indian goods, rising crude oil prices, currency pressures and global trade tensions have made investors more risk-averse.
ScanX.trade
