Bulk Deal: Smallcap stock jumps 9% after FII buys 11.18 lakh shares in the company

Synopsis: IndiaMART shares rose by 9% after Nalanda Capital showed a strong long-term commitment by acquiring almost twice the number of shares sold in the bulk deal, considering the absorption of bulk deal supplies. Fixed price accumulation, a fair valuation, and an improvement in revenue growth helped investors’ attitude turn positive.

The shares of this company, which is one of the first and largest B2B digital marketplace in the country, which focuses on integrating the Small and Medium Businesses (SMEs) into the new model with speed and ease, had its shares in momentum today after going through a bulk deal.

With the market cap of Rs 13,700 crore, the shares of Indiamart Intermesh Ltd have gained about 9% today and reached a high at Rs 2,304.95, compared to their previous day’s closing price of Rs 2,114.25. The shares are trading at a PE of 25.5, whereas its industry PE is at 29.6, and the shares have given a return of almost 250% since their listing in July 2019.

Why the share price jump?

But the sharp appreciation of 9% in IndiaMART InterMESH shares can largely be attributed to a strong vote of confidence by Nalanda India Equity Fund, as it supported the supply in the market by purchasing almost double the number of shares that have been sold by Smallcap World Fund. While the latter has sold 6.26 lakh shares, Nalanda purchased 11.18 lakh shares.

Secondly, the quality and intent of the buyer were more significant than those of the seller. This is because Nalanda Capital has been identified as an investor who often adopts a concentrated and long-term approach in investing in quality firms. Moreover, the group’s intent to increase their exposure to IndiaMART was evident when they purchased a 1.86% stake in the company at a single stock price. The total amount of the deal is Rs 236 crore. 

Lastly, the way in which the transaction was structured has aided in sustaining the positive sentiment. This has been done with a fixed price of Rs 2,110 per share, which signifies that there has been some solid demand at that price or even higher, creating a floor effect. Since there was more demand than supply, with a long-only institutional buyer adding more than twice the selling quantity, it has been perceived that the bulk transaction has been due to accumulation, resulting in a sharp momentum in its stock price.

Financials and strategic investments

The revenue from operations for the company stood at Rs 391 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 348 crores, up by about 12 per cent YoY. However, the net profit stood at Rs 83 crore in Q2 FY26, down compared to the Rs 135 crore profit in Q2 FY25.

The portfolio of other strategic investments showcases a diversified play in logistics, commerce, and enterprise SaaS platforms. It is comprised of core investments in SuperProcure (38%), which caters to transport management; Bizom (31.3%), which provides services for distribution and sales force management; and Archain (26.2%), which is into procurement automation and inventory management. 

Rounding off a robust supply chain structure are investments in Fleetx (22.2%), which provides services for logistics tracking, and a selective investment plan for IDfy (10%), which deals in fraud detection; M1xchange (9.6%), which provides services for invoice discounting; and many more firms. 

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