Chettinad Cement Corporation Ltd has hiked its stake in Hyderabad-based Anjani Portland Cement Ltd to 66.08 per cent by acquiring 17.08 per cent stake through an open offer, as per a stock market disclosure.
The company had earlier entered into a share purchase agreement in March 2014 to acquire up to 61.74 per cent stake in Anjani Portland for Rs 70 crore from the promoters.
This had also triggered an open offer as per SEBI takeover norms. Chettinad Cement has said that its agreement with promoters of Anjani Portland has a built-in flexibility to ensure that its holding is limited at 75 per cent, the maximum allowed for a firm to remain listed.
Given that the open offer was largely successful, Chettinad had limited its stake purchase from the promoters to 49 per cent.
This means it has shelled out Rs 29.5 crore to buy shares from the promoters and an additional Rs 19.4 crore to pick shares tendered in the open offer.
Motilal Oswal Investment Advisors Pvt Ltd managed this open offer.
The acquisition will help Chettinad Cement, which is already present in Tamil Nadu and Karnataka, enter Andhra Pradesh and Odisha.
Founded in 1983, Anjani Portland manufactures and distributes cement and cement products and has an integrated cement plant at Nalgonda, Andhra Pradesh with a capacity of 1.2 million tonnes (MT) per annum. For the year ended March 31, 2014, it had net sales of Rs 73.02 crore with a net profit of Rs 14.10 crore.
Shares of Anjani Portland were trading at Rs 49.95, up 4.28 per cent on BSE in a strong Mumbai market on Wednesday at 25 PM.
For Chettinad Cement, the deal will help in achieving its target of reaching capacity of 15 MT by 2015. It currently has annual cement capacity of over 11.5 MT. It would also make it a strong regional player in southern market.
In this space, most recently, Sagar Cements Ltd said it is selling its entire stake in its joint venture Vicat Sagar Cement Pvt Ltd to France-based Parficim SAS, an affiliate of Vicat SA, for Rs 435 crore ($72.3 million).
(Edited by Joby Puthuparampil Johnson)