Madhu Kela's Singularity Equity Fund acquires stake in this small-cap stock via block deals worth ₹42.60 crore

Small-cap stock Shankara Building Products saw a sharp rise in investor interest after ace investor Madhu Kela’s fund acquired a significant stake through block deals. 

In a notable transaction on June 9, Singularity Equity Fund I, backed by renowned investor Madhu Kela, acquired 4.6 lakh shares of Shankara Building Products at ₹926.1 per share via block deals for a total of ₹42.6 crore. The company, a leading organised retailer of home improvement and building products in India, operates under the brand name "Shankara Buildpro".

The acquisition came alongside a major stake sale by the company’s promoter and Managing Director, Sukumar Srinivas, who offloaded a 7.8 percent stake through open market transactions, amounting to ₹176 crore. According to BSE data, Srinivas sold 19 lakh shares at an average price of ₹926.1 apiece, bringing the promoters’ holding down to 41.41 percent from 49.25 percent earlier.

Besides Kela’s fund, other prominent investors such as Chartered Finance and Leasing, Ace Infracity Developers, Sageone Investment Managers LLP, and foundations like Riti Foundation, RR Foundation, S R Foundation, and Swati Foundation also participated in the block deals.

Strong Q4 but full-year net subdued

Shankara Building Products reported a 17.46 percent year-on-year rise in net profit at ₹28.45 crore for the quarter ended March 2025, up from ₹24.22 crore in the year-ago period. Revenue for the quarter surged 19.08 percent to ₹1,639.16 crore versus ₹1,376.55 crore in Q4FY24.

However, for the full year, the company posted a 4.60 percent decline in net profit to ₹77.40 crore from ₹81.13 crore in FY24, despite a 17.98 percent rise in revenue to ₹5,696.69 crore.

During its earnings call, the management highlighted that the steel sector faced considerable headwinds through the year, primarily due to a decline in realisations, which in turn pressured margins. Still, the company clocked a robust 30 percent volume growth in FY25. According to Vice President Dhananjay Mirlay Srinivas, segments like structural steel tubes and pipes have shown resilient demand, enabling the company to maintain growth momentum.

Stock on a tear

Shares of Shankara Building Products surged 6.7 percent in the previous session following the block deals and touched a new 52-week high of ₹1056.60. On Tuesday, June 11, the stock gained another 2.6 percent to hit an intraday high of ₹1,024.

With this, the smallcap stock has rallied nearly 130 percent from its 52-week low of ₹444.40 hit in October 2024. In the past one year alone, it has delivered a 44 percent return. The upward momentum has continued in recent months, with gains of 23 percent so far in June, extending its winning streak to four straight months—after rising 36.5 percent in May, 5.4 percent in April, and 2.5 percent in March. The stock, however, faced pressure earlier in the year with declines of over 10 percent each in January and February.

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