The Bank of New York Mellon Corporation (BNY Mellon), the New York-based asset management and security trading company which has assets worth $21.8 trillion, has increased its stake in the N Srinivasan-promoted India Cements (ICL) to over 10%, from over 1% it was holding as of the quarter ended June 30, 2010. BNY Mellon has bought the stake on behalf of two of its clients?Mellon Capital Management Corporation and Boston Company Asset Management, sources said.
BNY Mellon has increased its stake in India Cements through creaping acquisition route between June quarter and late July. As of July, BNY Mellon’s stake in India Cements stood at 10.07%, up from 1.06% as of the quarter ended June.
India Cements shares rose 0.10% to close at Rs 104.45 on the BSE. Annually, the stock has a high of Rs 144.75 and low of Rs 96.80. Several brokerages has maintained a buy on the stock despite severe margin pressure in the South, the focus market of the company. Angel Broking in its recent research report on the company has maintained a ?buy? on India Cement stock with a target price of Rs 139.
Despite the margin pressure and a degrowth in its core markets of Tamil Nadu and Kerala, the company is expected to improve its performance since the firm is making a major foray into North with the commissioning of its 1.5 million tonne per annum (mtpa) green field cement plant in Rajasthan, analysts said. Also, ICL’s commissioning of two 50 mw captive power plants in Tamil Nadu and Andhra Pradesh is expected to cut its fuel bill. The company’s dependence on external sources for feedstock is also slated to decline once its recently acquired Indonesian coal mine goes on stream, the brokerage house stated.
India Cements is the second largest cement manufacturer in South India with a capacity of 14 mtpa, which it plans to scale upto 16 mtpa by the end of this fiscal and has an estimated market share of close to 20%. The company has recently raised over Rs 295 crore by way of a qualified institutional placement (QIP) to fund its working capital and expansion-cum-modernisation projects as well as retiring high cost debts.
The promoters stake in the company declined from 28.33% as of June 2009 to 25.19% as of the quarter ended June 30, 2010. The other major stakeholders in the company include LIC (6.72), HSBC Global Investment Funds, Mauritius (6.05%), Trishul Investment (5.71%) and Aspon Ltd (2.75%). For the quarter ended June 30, 2010, the company has clocked a net sales of Rs 880.69 crore and posted a net profit of Rs 24.98 crore.
Incorporated in 2007, by merging Mellon Financial Corporation and The Bank of New York Company, BNY Mellon, is one of the leading asset management and securities services company. It has $21.8 trillion in assets under its custody and manages $1 trillion.
