India Cement: Building prospects

Talks of billionaire Radhakishan Damani look set to take control of India Cement has sent the stocks price to tizzy height.

The south-based cement makers share price rallied over 10% in early trade. The counter has pared part of its gains and now quotes 6% higher at Rs 133.80 apiece on NSE.

Damani has informally reached out to the cement manufacturer’s controlling shareholder, N Srinivasan, to explore a takeover, media report suggested.

Srinivasan, who controls about 29% of the Chennai-based cement maker, is also exploring other investors to ward off any hostile bids.

Damani has promised a friendly change in management and isn’t seeking a hostile takeover. No decision has been made on how Damani and Srinivasan will proceed yet.

Damani’s family, who is the promoter of the retail chain D-Mart, has steadily increased shareholding in India Cements over the past few months. It stood at 15.16% as of March 2020.

Damani and his brother Gopalkishan S Damani together now hold 19.89% in India Cements.

Radhakishan Damani held 4.73% in India Cements as of December 2019, which has gone up to 10.29%, while his brother Gopikishan Shivkishan Damani owned 8.26% on March 31, 2020.

India Cement stock had a tough time in past two-year, due to the IPL match fixing saga. The company owned Chennai Super King franchise.

Since the Damani’s acquired stake in the company, the counter has witnessed turn in its fortune.

Investors stuck in the counter can hope to see further price recovery. Meanwhile, on a standalone basis, India Cements posted Rs 5.37 crore net loss for the quarter ended December 31, 2019 against a net profit of Rs 3.13 crore for the same period last year.

Net sales declined to Rs 1,191.12 crore from Rs 1,316.30 crore during the same period. The company is yet to announce its financial results for March quarter.

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