Shree Cement has withdrawn from the race to acquire about 40-70% stake in Sanghi Cement for an enterprise value of Rs 6,000 crore, as the Kolkata-headquartered firm intends to focus on its own expansion plans. “We will focus on our greenfield and brownfield expansion plans. We don’t want to bid for Sanghi Cement in the current scenario,” Prashant Bangur, vice chairman, Shree Cement, told FE.
Shree Cement’s short-term focus will be on “own internal expansion”, he said without elaborating.
The enterprise value for Sanghi Cement includes a debt of Rs 1,800 crore. According to sources, Shree Cement would have had to shell out anywhere Rs 1,680-3,024 crore for the stake, most of which would have been bought from the promoters.
Sanghi Cement, which mainly caters to the western markets of Gujarat, Rajasthan, Maharashtra and Madhya Pradesh, has a production capacity of 6.1 MTPA. It also owns a captive power plant with a capacity of 143 MW.
Sanghi Cement is the brand name of Sanghi Industries’ cement products. Sanghi Industries, listed on both BSE and NSE, had posted a net loss of Rs 325.70 crore for FY23 on revenues of Rs 928.36 crore. The company’s promoters hold 72.72% stake, and had pledged almost 99% of its shares. Sanghi Industries’ share price closed up 4.99% at Rs 88.35 on the BSE.
According to media reports, companies like UltraTech, Dalmia Bharat, JK Organisation, Nirma Group and JSW Cement were interested in bidding for the stake.
A JSW Cement spokesperson denied that the company was in talks for a stake buy in Sanghi Cement.