Multibagger Swan Energy shares spike 25% in 9 sessions to hit 5-month high; what’s fueling the rally?

Shares of Swan Energy, which operates in sectors such as textiles, real estate, oil and gas, petrochemical manufacturing, and trading, surged 25% to ₹734 apiece over the last nine trading sessions to hit a 5-month high. This significant rise has propelled the stock to gain 175% over the past year and 600% in the last five years.

The recent boost in shares followed an investment by global asset manager BlackRock, which purchased shares worth ₹304 crore through open market transactions on June 8 at a price range of ₹666.20–692.60 per share.

BlackRock, through its three affiliates, acquired 45.56 lakh shares, representing a 1.45% stake in Swan Energy. 

Meanwhile, the company's recent shareholding data showed that Life Insurance Corporation of India (LIC) held a 4.28% stake at the end of FY24, while SBI Life Insurance owned a 2.55% stake, according to Tendlyne.

The promoters held a majority stake with 54% ownership, of which 18.40% was pledged, as per Trendlyne data.

The company has recently gained attention following its acquisition of Reliance Naval & Engineering (RENL) in October 2023. RENL was the first private sector company in India to obtain the license to build warships and has India’s largest integrated shipbuilding facility with a 662 m x 65 m drydock.

This business segment is experiencing significant opportunities in defence and commercial shipbuilding, ship repair and upgrades, oil and gas rig repair, and heavy engineering, boasting the world’s second-longest dockyard, according to domestic brokerage firm Sunidhi Securities & Finance.

It is claimed to be the only Indian modular shipbuilding facility capable of accommodating vessels up to 400,000 DWT.

Earlier, the company acquired a 55% stake and controlling interest in Veritas India, a listed entity, through a share purchase agreement in May 2022 at ₹117 per share. VIL is a multi-faceted organisation with diversified business interests and dimensions, primarily engaged in trading, distribution, and manufacturing of commodities like chemicals & petrochemicals catering to the petrochemical, paint, and oil refining industries.

VIL has a tank terminal complex at Hamriyah Free Zone, Sharjah, with 30 storage tanks totaling a capacity of 172,000 CBM, capable of handling a wide range of petroleum products, as per the brokerage. 

Veritas India has several subsidiaries, including Veritas Polychem Private Ltd., which is establishing manufacturing, storage, and bottling facilities at Dighi Port in Maharashtra with an investment of ₹20,500 million. Phase I of this project will feature a 175,000 TPA PVC plant, a 360,000 TPA Polymer Modified Bitumen plant, six gas storage terminals, and a captive power plant.

Originally incorporated in 1909 as a textile company, Swan Energy was acquired by its current promoters, Mr Navinbhai Dave and his son-in-law, Mr Nikhil Merchant, in 1992 from the JP Goenka group.

In recent years, the company has diversified into oil and gas, petrochemicals, defence, and shipyards, while maintaining active engagements in the textile and real estate sectors.

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