Ambuja Cements shares gained 2 per cent and were among top gainers on NSE on Thursday after the Cabinet Committee on Economic Affairs (CCEA) approved the company’s proposal to acquire 24 per cent stake in its holding firm Holcim India, paving way for restructuring of of its parent Swiss giant LafargeHolcim to strengthen India footprint.
At 10.21 am, share price of the company was trading 1.35 per cent up at Rs 265.75. The scrip opened at Rs 264 and has touched a high and low of Rs 267.40 and Rs 263.10, respectively, in trade so far. Later, share price of Ambuja Cements closed 1.47 per cent up at Rs 266.05.
Ambuja Cements and ACC are subsidiaries of world’s largest cement maker LafargeHolcim founded in 2015 following the merger of Lafarge and Holcim. Shares of ACC were trading 3.59 per cent up at Rs 1692.10 at 10.34 am. Later, share price of ACC settled the day 4.13 per cent up at Rs 1700.90.
“The deal has happened at enterprise value per tonne (EV/Tonne) for $145/t. There has been divergent views on whether there should be a holding company discount on related business and if eventually this structure might not remain given HOLCIM/Lafarge could have only one company listed going forward. Hence currently not assigning any holding company discount on the same. Even if you assign a 10% discount then the stock should not see a fall of more than 2-3% at best as target comes to Rs 252/share,” Religare Capital Markets said in a research note.
“The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the proposal for Ambuja Cements Ltd for acquisition of 24 per cent shares in its holding company Holcim (India) Pvt Ltd from Holderind Investment Ltd,” an official statement said.