Shares of UltraTech Cement, ACC, and Ambuja Cements rose 1.24% to 4.43% at 13:54 IST on BSE on media reports that these companies have hiked cement rates by Rs 10-25/bag.
UltraTech Cement (up 4.43%), ACC (up 1.24%), and Ambuja Cements (up 1.25%) edged higher.
Meanwhile, the S&P BSE Sensex was down 113.63 points or 0.41% at 27,392.83.
UltraTech Cement's board of directors at its meeting held yesterday, 23 December 2014, approved acquisition of two cement units of Jaiprakash Associates in Madhya Pradesh viz. integrated cement plant with clinker capacity of 2.1 mtpa and cement grinding capacity of 2.6 mtpa at Bela, Madhya Pradesh (MP), integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP, and 180 MW TPP of which 25 MW is situated at Bela and 155 MW at Sidhi.
UltraTech board has approved the memorandum of understanding setting out the broad terms and conditions of the proposed acquisition. The enterprise value of this acquisition has been agreed at Rs 5400 crore, UltraTech Cement said in a statement. The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.
UltraTech Cement said that this acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8 - 2.5 MTPA in addition to the 4.9 MTPA. This acquisition will enable the company to increase its presence in Satna cluster of MP, UltraTech Cement said. With this acquisition, the company's cement capacity in India will increase from about 60 MTPA to 65 MTPA and with projects underway, the capacity will stand raised to about 71 MTPA by 2016, UltraTech Cement said in a statement.
Ambuja Cements said after market hours yesterday, 23 December 2014, that the company has filed a Special Leave Petition in the Supreme Court, challenging a demand notice for Rs 248 crore arising from disallowance of a sales tax incentive availed by the company in Rajasthan for the period 2001-02 to 2008-09. Ambuja Cements said that the company had availed sales tax incentives under the incentive schemes of the Rajasthan state government for the period 2001-02 to 2008-09 pursuant to the order passed by the Board of Industrial and Financial Rehabilitation (BIFR) while sanctioning the Scheme of Rehabilitation of erstwhile Ambuja Cements Rajasthan which was subsequently merged with Ambuja Cements. Later, the Assistant Commissioner, Commercial Taxes Department, Rajasthan issued demand notices on the company for Rs 248 crores (including the interest of Rs. 134 crores) by rejecting the company's claim of availing sales tax incentives under the BIFR order. The company had subsequently filed Writ Petitions in the Jodhpur bench of the Rajasthan High Court challenging the demand notices. On 19 December 2014, the Rajasthan High Court passed an order dismissing the writ petitions filed by the company.
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