UltraTech Cement rose 2.10 per cent to INR807.60 at 11:29 IST on BSE, extending gains for the sixth day in a row, after the boards of both UltraTech Cement and the unlisted Samruddhi Cement approved a merger deal.
The announcement was made before market hours on 16 November 2009.
Meanwhile, the BSE Sensex was up 76.80 points, or 0.45 per cent, to 17,098.65. On BSE, 10,290 shares were traded in the counter as against an average daily volume of 72,935 shares in the past one quarter.
The stock had hit a high of INR810 and a low of INR780 so far during the day. The stock had hit a 52-week high of INR886.25 on 5 October 2009 and a 52-week low of INR250 on 25 November 2008.
The stock has risen 10.72 per cent in six trading sessions from a recent low of INR729.40 on 13 November 2009.
The large-cap stock had underperformed the market over the past one month till 20 November 2009, falling 4.02 per cent as compared to the Sensex’s 1.17 per cent fall. It had also underperformed the market in the past one quarter, rising 11.17 per cent as compared to the Sensex’s return of 13.39 per cent.
The company’s equity capital is INR124.49 crore. Face value per share is INR 10. The current price of INR807.60 discounts the company’s Q2 September 2009 annualised EPS of INR80.60, by a PE multiple of 10.02.
The exchange ratio for the merger was pegged at 4:7 i.e. Samruddhi shareholders will get four shares of UltraTech of a face value of INR10 each for every seven shares of face value INR5 each.
The deal will make UltraTech, already the largest cement company in India by total capacity, the 10th largest in the world. The merged entity will have 48.8Mta of grey cement capacity across 22 plants and 11.7Mm3 of ready-mix concrete capacity across 68 plants, along with captive thermal power plants generating 504MW.
In early October 2009, Grasim said it will transfer its cement business to its unlisted unit Samruddhi Cement in a cashless transaction and later merge it with group firm UltraTech as a part of a plan to bring the cement business of the Aditya Birla group under one roof. UltraTech Cement is engaged in manufacturing and marketing clinker and cement in India.
UltraTech Cement’s net profit surged 52.81 per cent to INR250.90 crore on 10.64 per cent rise in net sales to INR1540.81 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in manufacturing and marketing clinker and cement in India.