Radhakishan Damani raises stake in India Cements to 22.76%, stock jumps almost 9%

Ace investor Radhakishan Damani has increased his stake in India Cements to 22.76%, a regulatory filing by the company revealed.

India Cements share price has had a volatile year on the bourses. (Image: REUTERS)

Ace investor Radhakishan Damani has increased his stake in India Cements to 22.76%, a regulatory filing by the company revealed. With this, the stock price rallied as much as 8.9% on Wednesday morning, to trade at an intra-day high of Rs 192.35 per share. Radhakishan Damani, along with his family, has been increasing his stake in the cement manufacturing company for the last one year. The billionaire investor, who is often dubbed as Rakesh Jhunjhunwala’s mentor, is the promoter of Avenue Supermarts, a hypermarket giant, and is known for being a value investor.

Radhakishan Damani ups stake

Radhakishan Damani along with Gopikishan Damani, Shrikantadevi Damani, Kirandevi Damani, and others purchased 62.98 lakh shares of India Cements in the open market, according to the regulatory filing. According to the filing, Radhakishan Damani and his family acquired the shares over November this year, and the latest share acquisition was made on December 20. Currently, Radhakishan Damani owns 7.05 crore equity shares of India Cements or 22.76%. Earlier at the end of September this year, the billionaire investor held a 21.14% stake in the company.

India Cements share price has had a volatile year on the bourses. The stock has managed to gain a little over 2.5% so far this year. Since the middle of November, the stock is down more than 16%. At today’s high, Radhakishan Damani’s entire stake in the company is valued at Rs 1,357 crore.

Analysts positive on cement sector

“India’s cement sector has been in the midst of an up-cycle since FY19, with a robust demand undercurrent across segments, peaking utilisations, and strong realisations,” said analysts at JM Financial in a recent report.  Analysts added that the cement sector has seen strong cash generation over FY20-21 led by profitability improvement, partially aided by the release of working capital. “Strong cash flows have helped drive both the deleveraging exercise and funding of expansion projects. Net debt for the sector has declined from its peak in FY19 and net debt-to-EBITDA for the players under analysis is comfortable at -2.4x to 2.6x,” they said. 

Earlier this week, domestic brokerage and research firm HDFC Securities, in their annual outlook report said they are positive on the cement sector. “Strong cash flows have helped drive both the deleveraging exercise and funding of expansion projects. Net debt for the sector has declined from its peak in FY19 and net debt-to-EBITDA for the players under analysis is comfortable at -2.4x to 2.6x,” they said.

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