Century -UltraTech deal would be a win-win situation for both companies, if it materialises: P Phani Sekhar

In a chat with ET Now, P Phani Sekhar, Fund Manager - PMS, Karvy Stock Broking, shares his view on the buzz regarding selling of cement business by Century Textiles to Ultratech Cement.

ET Now: At Rs 10,000-crore enterprise value (EV), what does this leave for investors of Century Textiles given that there would be then comparisons to listed entities such as UltraTech Cement, ACC Ambuja Cements?

P Phani Sekhar: If the deal goes through, then it is a fantastic deal both for Century minority shareholders as well as UltraTech. At $130 to $140 that is EV per tonne, it is one of the relatively more attractively-valued deal as far as cement sector is concerned because you have companies with much smaller capacities going at valuations which are 20 per cent to 30 per cent higher than this.

Therefore, with a capacity around 13 million tonne per annum, it will be handy for UltraTech too which is planning to expand.

More importantly, if it goes through at $130 to a tonne, I guess even UltraTech shareholders will be benefited because it will be lower than the UltraTech valuations. It is an all-round positive deal and considering that we are at the trough of the investment cycle, as things improve relatively more attractively valued cement assets will do better than those which have already run up in expectations of things happening.