Advertisement

HindustanTimes Thu,10 Jul 2014

Ambuja, ACC stocks drop after Holcim’s rejig

HT Correspondent, Hindustan Times  Mumbai, July 26, 2013
First Published: 01:08 IST(26/7/2013) | Last Updated: 03:05 IST(26/7/2013)

Shares of Ambuja Cements plunged by 10.52% in trading on Thursday on news that Swiss-based building materials company Holcim is revamping its India operations. Shares of the company fell by Rs. 20 to close at Rs. 171 on the Bombay Stock Exchange (BSE).

Advertisement

Ambuja had on late Wednesday evening announced the acquisition of Holcim's 50.3% stake in ACC through cash and allocation of shares to Holcim. Shares of ACC fell by 3% to close at Rs. 1,194 or down by Rs. 39.90 on BSE. “We believe this acquisition will not benefit Ambuja shareholders in the near term and expect a derating in the company's valuation multiple,” said Sanjeev Singh of Centrum Broking.

http://www.hindustantimes.com/Images/Popup/2013/7/26_07-biz-04.jpg

Onne Van Der Weijde, managing director, Ambuja Cements, sadi that the transaction was “a natural and an important step towards further strengthening Holcim Group's India platform to increase profitability and facilitate more flexible use of capital.” 

Analysts decry this move. “While the company talked of synergy benefits of Rs. 800-900 crore through logistics and fixed-out rationalisation in phased manners in two years, the deal would lead to Rs. 3,500 crore cash outflow from the books of Ambuja to the parent company,” said a note from Karvy Broking.


Advertisement
more from Business

Analyst comments: FM Jaitley pegs fiscal deficit target at 4.5%

Finance Minister Arun Jaitley said the country will stick to the fiscal deficit target of 4.1% of gross domestic product (GDP) set by the previous government for the year ending March 2015. Jaitley added the fiscal deficit would narrow to 3.6% of GDP by fiscal 2015/16 and to 3 % by 2016/17.
markets
Advertisement
Most Popular
Advertisement
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved