India Cements acquires Raasi

With this, India Cements gets a majority 53 per cent stake in Raasi Cements and becomes South India’s largest cement maker with 7.5 million tonnes per annum capacity company.

Reacting to the announcement, the Raasi scrip crashed to Rs 181 from Rs 187 at the closing on the BSE in a bullish market, while India Cements share improved to Rs 63.15 from Rs 57.60.

"We are happy that Dr B V Raju and his associates have agreed to sell their stake in Raasi Cement. The consolidation process will be beneficial to both companies asit would result in production, marketing and distribution synergies," he said. "At a later date, we plan to merge both the companies," he said.

Today’s acquisition marked the end of an acrimonious takeover battle over Raasi Cements. Earlier, N K P Raju, one of the promoters and son-in-law of the founder B V Raju sold his 9.2 per cent stake to India Cements. It was followed by another block of 7 per cent stake sale by the Andhra Pradesh Industrial Development Corporation, and finally by B V Raju himself.

In order to thwart the hostile’ takeover, Raju had challenged the SEBI’s takeover code in the Andhra Pradesh High Court argiung that the takeover code does not give the promoters any chance to defend itself. After an initial stay, the Andhra Pradesh High Court vacated its earlier stay against the takeover proceedings.

With this acquisition, India Cements will emerge as south India’s largest cement manufacturer with about 7.5 million tonnes per annum capacity. Both companies combined will enjoy a marketshare of 35 per cent in the south India. To fund the takeover, ICL plans to launch a rights issue of Rs 175 crore, take a debt of Rs 40-50 crore.