India Cements stocks rally on investor Damani’s takeover buzz
India Cements stocks rallied on Wednesday after reports that marquee investor Radha Kishan Damani is exploring a takeover.
But the Chennai-headquartered cement behemoth dismissed it as speculation in its communication to the stock exchange. “We reiterate that the Company is in total compliance of all the disclosure requirements to the stock exchanges under Regulation 30 of the SEBI (LODR) Regulations, 2015 and wish to clarify that other than the disclosures already available in the stock exchanges, we have no other information / announcement (including impending announcement) to be made, which in our opinion may have a bearing on the price behaviour in the shares of our Company,” S Sridharan, Company Secretary, India Cements, said in the filing. The stock was trading up more than six per cent at Rs 133.70. In early trade, the stock was up by more than 10 per cent. It was reported that Damani is considering acquiring a controlling stake in India Cements.
Damani, the owner of Avenue Supermarts, has informally reached out to the cement manufacturer’s controlling shareholder, N Srinivasan, to explore a takeover, the report said.
An industry veteran, who is tracking the developments in India Cements, told DTNext, on condition of anonymity that this seemed to “be an opportune moment to up the stake.” Damani could also be looking at this from a right valuation perspective. Srinivasan, who controls about 29 per cent in the cement company, is also exploring other investors to ward off any hostile bids, the report said, adding Damani has promised a friendly change in management and isn’t seeking a hostile takeover. Radha Kishan Damani has increased the equity stake in N Srinivasan’s India Cements to just under 20 per cent.
The latest shareholding pattern for quarter ending March 2020 submitted to the stock exchanges shows that prominent investor RK Damani with his family members have raised stake in India Cements from 4.73 per cent at the end of 3QFY20 to around 20 per cent by end-4QFY20. The stake increase has been through purchase of shares from open market.