Multibagger stock rises 6% on $36 million acquisition, check details 

Shares of CG Power & Industrial Solutions gained 6% amid weakness in the broader market on Monday after the firm said it has inked definitive agreement to buy Renesas Electronics Corporation’s radio frequency (RF) components business for $36 million, marking its entry into semiconductor design.

The RF components business, part of Japan-based Renesas, generated $56 million in revenue in 2023. Under the agreement, CG Power will acquire intellectual property, equipment, inventories, and select employees, helping to enhance its expertise in RF component design and marketing. A new subsidiary, CG Semi Pvt Ltd, has been formed to manage the Outsourced Semiconductor Assembly and Test (OSAT) operations.

The acquisition is expected to be completed in about 6 months. 

Commenting on the acquisition, Vellayan Subbiah, Chairman of CG Power and Industrial Solutions Limited, said, "A significant number of semiconductor designers globally are Indians. Through this acquisition, we aim to enhance India’s presence in the semiconductor design & development space, considered to be a high-growth and high-profitability sector."

The stock of the firm rose 6% to Rs 761.95 on Monday against the previous close of Rs 718.80 on BSE. Market cap of the firm climbed to Rs 1.16 lakh crore.

CG Power and Industrial Solutions posted over 18 per cent rise in consolidated net profit at Rs 241.24 crore in Q1 mainly on the back of higher revenues. Net profit in the year-ago period stood at Rs 203.84 crore. Total income rose to Rs 2,260.67 crore in the quarter from Rs 1,896.15 crore a year ago.

CG Power is engaged in the providing end-to-end solutions to utilities, industries and consumers for the management and application of electrical energy. The company offers products, services and solutions through two segments: Power Systems and Industrial Systems. Its power systems segment includes transformers, switchgear, automation and turnkey projects. Its industrial systems segment includes electric motors, alternators, drives, traction electronics and supervisory control and data acquisition systems (SCADA).