Orient Refractories surges 18% after news of merger

Shares of Orient Refractories rose more than 18 per cent on Wednesday, after the world’s largest refractory player, London Stock Exchange-listed RHI Magnesita, announced the merger of its Indian operations to consolidate its position here.

According to a filing by Orient Refractories, RHI Magnesita would merge its privately-owned companies with locally listed Orient Refractories, whose board approved the proposal on Tuesday.

Its shares ended at Rs 231.85, up 10.85 per cent, on the BSE, after gaining to as much as Rs 248.15 intraday.


As per the filing with the BSE, RHI India and RHI Clasil shareholders would get shares of Orient Refractories on completion of the merger.

The merger aims to achieve a simplification of the corporate structure and consolidation of RHI Magnesita’s operating entities to tap growth potential in the Indian market, more effectively and efficiently, it said.

RHI Magnesita is a global refractory supplier, with revenue of 2.7 billion euros in 2017. It has more than 14,000 employees in 35 main production sites and more than 70 sales offices. Refractory products are used in high-temperature industrial processes like in the production of steel, cement, glass, etc.

In India, the combined company is estimated to have operating revenue of Rs 1,235.6 crore as against the Rs 626.8 crore posted by Orient Refractories in fiscal 2018 ended in March. It will have four production facilities with over 700 employees. After the completion of the merger, Orient Refractories is proposed to be renamed RHI Magnesita India.

In order to strengthen its position in India, RHI Magnesita had acquired 43.6 per cent of Orient Refractories in 2013. After a mandatory open that followed the deal, it currently holds a 69.6 per cent stake. RHI India, a wholly owned subsidiary of the parent, is the Indian sales company of the RHI Magnesita group. RHI Clasil is a manufacturer and supplier of mainly alumina-based refractories for the steel and cement industries and is 53.7 per cent-owned by RHI Magnesita.