Ambuja Cements rose 0.76% to Rs 264.20 at 10:15 IST on BSE after Cabinet approved proposal of the company for acquisition of 24% shares in its holding company, Holcim (India).
The announcement was made after market hours yesterday, 20 July 2016.
Meanwhile, the S&P BSE Sensex was down 35.47 points or 0.13% at 27,880.42.
On BSE, so far 40,714 shares were traded in the counter as against average daily volume of 2.35 lakh shares in the past one quarter. The stock hit a high of Rs 267.40, which is also a 52-week high for the stock. The stock hit a low of Rs 263.10 so far during the day. The stock had hit a 52-week low of Rs 185 on 29 February 2016. The stock had outperformed the market over the past one month till 20 July 2016, advancing 8.64% compared with Sensex’s 3.9% rise. The scrip had also outperformed the market in past one quarter, gaining 15.89% as against Sensex’s 8.02% rise.
The large-cap company has equity capital of Rs 310.38 crore. Face value per share is Rs 2.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, yesterday, 20 July 2016 approved the proposal for Ambuja Cements for acquisition of 24% shares in its holding company-Holcim (India) from Holderind Investment and subsequent reverse merger through a share swap. This would entail outflow of Rs 3500 crore.
These transactions would enable Lafarge Holcim group to create a linear corporate structure of Indian operations through its subsidiary ACC and a parent Ambuja Cements, with a view to harvest significant synergies from India operations. This will further strengthen all India footprints, debt free balance sheet and cash flow generation for Lafarge Holcim group, bringing in huge prospects for further expansion and creation of employment opportunities.
Holcim (India) holds 9.71% and Holderind Investments together holds 40.57% stake in Ambuja Cements (as per the shareholding pattern as on 30 June 2016). Holcim (India) holds 50.05% and Holderind Investments together holds 0.29% stake in ACC (as per the shareholding pattern as on 30 June 2016).
Swiss cement major Holcim in 2013, announced a major restructuring of its India operations. Ambuja Cements on in 2013, approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
Such a change in structure was the outcome of Lafarge SA and Holcim Group wanting to restructure their businesses in India after their global merger in 2014 to form a merged entity, LafargeHolcim. It may be recalled that Switzerland-based Holcim had merged with France’s Lafarge in 2015 to form LafargeHolcim. LafargeHolcim announced on 11 July 2016, that it has entered into an agreement with Nirma for the divestment of the former’s interest in Lafarge India for an enterprise value of about $1.4 billion.
Ambuja Cements’ net profit fell 4.4% to Rs 303.76 crore on 0.3% decline in net sales to Rs 2418.30 crore in Q1 March 2016 over Q1 March 2015.
Ambuja Cements is engaged in manufacturing and marketing cement and clinker for both domestic and exports.