RHI Magnesita soars 14% post acquisition of Dalmia's Indian refractory biz

Shares of RHI Magnesita India soared 14 per cent to Rs 735 per share in Monday’s intra-day trade, after the company announced acquisition of the Indian refractory business of Dalmia Bharat Refractories Limited (DBRL) for Rs 1,708 crore.

The stock of this refractories company traded close to its 52-week high level of Rs 738.10, which it had touched on October 21, 2022. In comparison, the S&P BSE Sensex was down 1 per cent at 61,085 at 02:36 pm. In the past one year, the stock price of RHI Magnesita zoomed 110 per cent, as against 2.5 per cent rise in the benchmark index.

RHI Magnesita India is a leading India-based supplier of high-grade refractory products, systems, and solutions to India and West Asia region, which are indispensable for industrial high-temperature processes exceeding 1,200 degree celsius in a wide range of industries including steel, cement, non-ferrous metals and glass. DBRL is one of India’s leading refractory players and a long-term trusted partner to customers in the region.

"DBRL will transfer its Indian refractory business to Dalmia OCL (DOCL). Under the terms of a share swap agreement, RHI Magnesita will acquire all outstanding shares in Dalmia OCL (DOCL) in exchange of 27 million new shares in RHI Magnesita India. Based on the issuance price of RHI Magnesita India at Rs 632.5029 per share, the share consideration had a value of approximately Rs 1,708 crore," RHI Magnesita said.

Through the consolidation of DBRL’s production into RHI Magnesita’s existing operations, the management believes that significant network optimisation synergies will be captured. Moreover, the acquisition would add production capacities in important industrial regions in the southern and western regions of India where RHI Magnesita currently has no assets.