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Sagar Cements surges on plan to acquire 100% stake in BMM Cements

25 Sep 2014

Sagar Cements is currently trading at Rs. 345.00, up by 5.00 points or 1.47% from its previous closing of Rs. 340.00 on the BSE.

The scrip opened at Rs. 354.00 and has touched a high and low of Rs. 354.00 and Rs. 345.00 respectively. So far 269 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 396.95 on 02-Sep-2014 and a 52 week low of Rs. 131.25 on 17-Feb-2014.

Last one week high and low of the scrip stood at Rs. 375.00 and Rs. 339.90 respectively. The current market cap of the company is Rs. 591.19 crore.

The promoters holding in the company stood at 51.96% while Institutions and Non-Institutions held 7.51% and 40.52% respectively.

Sagar Cements (SCL) has received in-principle approval for the acquisition of 100% equity stake in BMM Cements, which owns a cement plant of 1 million tonne capacity per annum and a captive thermal power plant of 25 MW capacity in Gudipadu near Tadipatri Anantapur District in the state of Andhra Pradesh. This company which has an Enterprise Value of Rs 540 crore has limestone reserves of around 155 million tonnes (MT). The successful completion of the transaction is subject to further negotiation to arrive at the acquisition price and other terms and conditions.

The proposed acquisition by SCL is the result of a strategic decision taken to leverage on the company’s strengths and explore opportunities to expand scale and presence in South Indian markets and create value for its stakeholders.

With this acquisition, Sagar Cements group’ total cement capacity will go up to 3.75 million TPA from its existing capacity of 2.75 Million Tonnes, with 25 MW coal based thermal power plant. After the proposed acquisition, cement produced from BMM plant is proposed to be marketed under the brand ‘Sagar’. The company will leverage its marketing and distribution network to enhance its production capacities, reduce overheads and reach out to wider markets.


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Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323