Ambuja, ACC stocks tank post Holcim's restructuring plan

MUMBAI: Shares of Ambuja Cements today fell 10.5 per cent after Swiss cement-maker Holcim said it will increase stake in the company as part of restructuring its Indian operations.

ACC scrip was down 3 per cent at Rs 1,194.10 on the BSE. After falling 14.6 per cent to Rs 163.20 in intra-day trade, Ambuja's scrip finally ended at Rs 171, down 10.52 per cent from its previous close.

At the NSE, the stock plummeted by 10.62 per cent to settle at Rs 170.90. Ambuja Cements was the worst performer on the 50-share benchmark Nifty.

Following the sell-off, the market value of the company dipped by Rs 3,104 crore to Rs 26,397 crore.

Both ACC and Ambuja wilted under selling pressure following Holcim's restructuring move involving them.

"No material benefits likely, as both the companies continue to operate separately. We expect the deal to have neutral impact on fundamentals of both the companies and expect the stock to trade range bound in short-term," said Vivek Mahajan, Head of Research, Aditya Birla Money.

Holcim yesterday said it will merge holding firm Holcim India with its unit Ambuja Cements in a cash and share deal to restructure India operations in a two-step process.

Besides, as part of the process, Holcim India's over 50 per cent stake in ACC will go to Ambuja.

Holcim's stake in Ambuja will rise to 61.39 per cent, from a little over 50 per cent after merger of Holcim India with Ambuja.

Ambuja Cements would merge Holcim India through cash and share transactions. Ambuja will first acquire a 24 per cent stake in HIPL for Rs 3,500 crore, followed by stock merger between HIPL and Ambuja.

"As part of the merger, Holcim will receive 58.4 crore new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from 50.55 per cent to 61.39 per cent," Holcim said in a statement yesterday.

At present, Holcim has a controlling stake in both ACC and Ambuja. The Swiss major directly owns 40.79 per cent stake in Ambuja and another 9.76 per cent through Holcim India (HIPL). Holcim has 0.29 per cent in ACC directly and 50.01 per cent through HIPL.

Post these transactions, Holcim will have 61.39 per cent stake in Ambuja and 0.29 per cent stake in ACC directly. Ambuja will have 50.01 per cent stake in ACC.