ICICI offloads Mysore Cements stake

THE BUZZ GETS LOUDER ON THE DEAL STREET

ICICI Bank today sold its entire 8.48 per cent stake in the SK Birla group-controlled Mysore Cements to mutual funds and foreign institutions, including SBI Mutual Funds and Franklin Templeton Investments, for about Rs 36 crore. As many as 73.93 lakh shares were sold at Rs 48 each.

Sources close to the development confirmed that the bank has sold its stake in the company and clarified that it "has been sold to funds and foreign financial institutions and not to anyone from the corporate."

Mysore Cements' scrip hit a 52-week high of Rs 49.8 on the Bombay Stock Exchange today. It closed the day at Rs 49.75, up 4.85 per cent from the previous close.

Interestingly, this is the third time in a little more than a week that the cement company's scrip has touched the 52-week high.

On March 21, the stock had hit the high for the second consecutive trading session. Citigroup Global Markets Mauritius had bought 10.17 lakh shares of Mysore Cements, representing 1.16 per cent stake for a total consideration of Rs 4.43 crore. The surge was also fuelled by a speculation that a foreign major was eyeing equity participation in the company.

As on December 31, 2005, promoters hold 25.13 per cent stake in the company. Before today's deal, the institutional investors' holding stood at 23.38 per cent.

The company has an annual production capacity of almost 2 mt and has facilities in Karnataka and Madhya Pradesh.

Of late, foreign funds have been showing immense interest in the Indian cement industry. In January, GE Capital and British Virgin Islands-based investment fund Spinnaker Global Opportunity Fund had purchased debt from the existing lenders to Sanghi Industries, the Hyderabad-based cement and clinker manufacturer. The total value of the transaction, debt plus equity, was at about Rs 725 crore.

Other cement companies such as Andhra Cement, Saurashtra Cement and Dalmia Cement have also attracted interest from foreign and domestic funds such as JP Morgan, DSP Merrill Lynch and Asian Debt Management fund.

In a related development, Mysore Cements today announced that it has allotted 30 lakh warrants to Maya Trade Links. Moreover, 49,290 cumulative redeemable preference shares of Rs 100 each at par were allotted to Industrial Development Bank of India.