Shriram Group likely to sell cement business for R1,500 cr
In a bid to exit non-core businesses and focus on core areas, Chennai-based Shriram Group plans to sell its cement business, Sree Jayajothi Cements, and is in talks with global majors including Irish cement manufacturer CRH and France-based Vicat for the same.
Though the deal size is not known, market sources peg it around R1,500 crore.
The group, which boasts of revenues close to R14,000 crore, has presence in consumer finance, commercial vehicle lending, insurance, retail stock broking and real estate.
“We are in discussion with couple of potential investors including CRH, but nothing has been finalised as of date,” said an executive of Shriram EPC, a part of the Shriram Group.
Shriram EPC acquired controlling stake of over 65% in Sree Jayajothi Cements after it was unable to pay R500 crore worth of dues.
“It is now a challenging time for new entrants in cement sector because of low demand,” said Jinesh Gandhi, cement analyst, Motilal Oswal Securities. “Cement business is not its core business as it came to them by default and not by choice.”
Expert feel the acquisition will give the acquirer much needed access to the South Indian market.