Holcim hikes Ambuja stake for Rs 300 cr

Holcim today picked up 1.65 per cent stake in Gujarat Ambuja Cements for over Rs 300 crore through open market operations, taking its holding in the company to nearly 21 per cent.

Holderind Investments, part of the Holcom group, acquired 22.5 million shares of Gujarat Ambuja for Rs 136.65 a piece. The Indian promoters, the Sekhsharia-Neotia combine, hold 5.28 per cent stake.

Holcim had bought 3.7 per cent in Gujarat Ambuja Cements from its Indian promoters for Rs 690 crore two months ago.

The Gujarat Ambuja stock today closed at Rs 139.55 on the BSE, 2.12 per cent higher than yesterday's close of Rs 136.65. It touched an intra-day high of Rs 141.

Today's deal price of Rs 136.65 a share is 30 per cent higher than the Rs 105 a share "" including a non-compete fee "" that Holcim paid in January to buy 14.8 per cent stake in Gujarat Ambuja from its founders, the Sekhsaria and the Neotia families.

The 20 per cent mandatory offer for Gujarat Ambuja shareholders, following the acquisition of Indian promoters' stake, did not evoke much response, given the strong outlook for cement stocks in a booming construction industry.

The Holcim-Associated Cement Companies-Gujarat Ambuja combine has a capacity of 33.4 million tonne, followed by the Aditya Birla group at 31 million tonne.

The outlook for the cement industry in the country in the last two years had undergone significant changes. With an infrastructure boom and cement companies clocking high profit margins, foreign firms are making huge investments.

With the booming market outlook, valuations of companies have started going up. Holcim had picked up a stake in Associated Cement Companies in January 2005, the deal translated into an enterprise value of $100 per tonne.

Heidelberg coughed up an enterprise value of $117 per tonne when it acquired 51 per cent stake in Mysore Cement earlier this year.

With 10 per cent growth in the country's cement consumption, which industry experts said would only go up, cement companies have announced fresh capacities of 75 million tonne by 2009-10.