Dalmia Bharat dips 5% a day after inking deal to buy Jaiprakash’s biz units- QHN

Shares of Dalmia Bharat slipped 5 per cent to Rs 1,807 on the BSE in Tuesday’s intra-day trade on profit booking after the company emerged winner in its bid to acquire plan of Jaiprakash power and cement units. The said acquisition shall take place at an enterprise value of Rs 5,666 crore.

Dalmia Cement (Bharat) (DCBL), wholly-owned subsidiary of Dalmia Bharat on Monday entered into a binding framework agreement for the acquisition of clinker, cement and power plants from Jaiprakash Associates and its associate having total cement capacity of 9.4 MnT (along with clinker capacity of 6.7MnT and thermal power plants of 280MW) at an enterprise value of Rs 5,666 crore, the company said in a press release. READ MORE

These assets are situated in the states of Madhya Pradesh, Uttar Pradesh & Chhattisgarh.

The acquisition will enable Dalmia to expand its footprint into the Central Region and will represent a significant step towards realization of its vision to emerge as a pan India cement company with a capacity of 75 MnT by FY27 and 110‐130 MnT by FY31, the company said.

Despite today’s fall, the stock price of Dalmia Bharat has outperformed the market by gaining 10 per cent, as compared to 0.80 per cent rise in the S&P BSE Sensex. In past three months, it has zoomed 46 per cent, as against 18 per cent surge in the benchmark index.

Meanwhile, the market price of Jaiprakash Associates (JAL) dipped 8 per cent to Rs 10.81, falling 13 per cent from its high in intra-day high today. Jaiprakash Power Ventures too, slipped 5 per cent to Rs 7.90 on the BSE in intra-day deals.

The company has been taking steps to reduce its debt and repay to lenders and meet its commitments on pro active basis. In this regard, JAL had divested more than 20 MTPA cement capacity in favour of UltraTech Cement during 2014 and 2017, while selling its controlling stake of more than 2 MTPA cement capacity to Dalmia Group in 2015.

In order to repay the loans of lenders and concentrate in its other core areas of working, JAL has decided to divest from cement business completely. With the sale of cement capacity of 9.4 MTPA in favour of Dalmia Cement (Bharat), we hope and pray having demonstrated its creditable working, JAL will further ‘cement’ its credentials of being a trustworthy organization in infrastructure segment of the country in times to come, Manoj Gaur, Executive Chairman JAL said.