Binani Industries to buy public holding in cement unit

Binani Industries to buy public holding in cement unit
07 October 2010

Binani Industries Ltd said on Wednesday it received board approvals to acquire the entire public holding in its unit Binani Cement , sending shares of both companies soaring.

In a separate statement, Binani Cement said it will voluntarily delist equity shares from both BSE and NSE, after getting shareholders’ approval. Its shares rose as much as 20 per cent on the news, while the parent’s stock rose 16 per cent.

Traders expect that the purchase price would be decided using a reverse book-building method, which pushed up the stock price, said Jagannadham Thunuguntla, equity head at SMC Capitals.

In reverse book-building, shareholders can indicate the price at which they will tender the shares, he added. As on June 30, promoters hold 51.28 per cent stake, while non-institutions hold 41.75 per cent, institutions 6.97 per cent and foreign institutional investors hold 2.10 percent, BSE data showed. Binani Group is into manufacturing of cement, zinc, glass fibre and downstream composites.

Binani Industries would have to spend over INR7bn to acquire the entire shareholding at the current share price, Thunuguntla said, adding that this would be part of Binani Industries internal restructuring plan.
Published under Cement News