Welspun Corp stock surge questioned as promoters sell ₹1,417 crore stake

Welspun Corp's shares jumped 15% on August 22 after winning its single largest order worth $1.8 billion (₹17,200 crore) for supplying pipes from its US facility. The order book now stands at ₹42,000 crore. But Livemint reports that the market capitalisation rose by almost 50% of the order value, which analysts consider disproportionate to the incremental value of the contract. The order is to be executed over FY28 and FY29, and is not recurring, raising questions about revenue visibility beyond FY29.

Meanwhile, The Hindu Businessline reports that Welspun Corp promoters, along with MD and CEO Vipul Mathur, launched a block deal on August 26 to sell up to 6.3 million shares, or 2.4% of equity, raising up to ₹1,417 crore at a floor price of ₹2,250 per share, a 4.1% discount to the previous close. Livemint notes that the US business carries political and commodity price risks, and that the stock's EV/Ebitda multiple of 21 times FY27 guided Ebitda is not cheap. Welspun has guided for revenue of ₹20,000 crore and Ebitda of ₹2,850 crore for FY27.