Dalmia Bharat shares in focus on deal to buy Jaiprakash Associates' cement plants
Dalmia Bharat stock touched a high of Rs 1,925.70, up 1.04% on BSE within minutes of opening trade
- Dec 13, 2022,
- Updated Dec 13, 2022 9:48 AM IST
Shares of Dalmia Bharat were in focus today after the firm's wholly owned subsidiary - Dalmia Cement inked an agreement to acquire the cement, clinker and power plants of Jaiprakash Associates. Dalmia Bharat stock touched a high of Rs 1,925.70, up 1.04% on BSE within minutes of opening trade. Dalmia Bharat shares are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. However, the stock tumbled 4.67% later to Rs 1816.70 against the previous close of Rs 1905.70.
The stock opened higher at Rs 1925.70 on BSE. The stock has lost 1.85% in a year and fallen 0.01% in 2022. However, in a month, the shares have gained 10.77%. Total 7067 shares of the firm changed hands amounting to a turnover of Rs 1.31 crore in the morning session. Market cap of the firm fell to Rs 34,443 crore on BSE.
Jaiprakash Associates has a total cement capacity of 9.4 million tonne (along with a Clinker capacity of 6.7 million tonne and Thermal Power plants of 280MW). The plants are situated in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh. The deal for plants has been inked at an enterprise value of Rs 5,666 crore.
The acquisition will enable Dalmia to expand its footprint into the Central Region and will represent a significant step towards realisation of its vision to emerge as a Pan India Cement company with a capacity of 75 MT by FY27 and 110-130 MT FY31.
Also Read: Dalmia Bharat to acquire Jaiprakash Associates’ cement assets for Rs 5,666 crore
The transaction is subject to due diligence, requisite approvals from lenders/JV partner of Jaiprakash Associates and regulatory authorities. In October, Jaiprakash Associates and Jaiprakash Power Ventures had announced plans to sell stake in their cement business as well as some non-core assets to reduce debt.
Emkay Global has given a target of Rs 1,600 post the cement plants acquisition deal. Emkay said at the enterprise value, the transaction is likely to be at 30-40 per cent below replacement cost, owing to: vintage assets; lack of interest from peers; and likely need for additional capex to run the operations.
"We are yet to build the transaction in our estimate, as we await clarity on: plant-wise break-up of the acquired assets; availability of limestone reserves; optionality on capacity expansion; additional/maintenance capex required to run operations; funding break-up; and timelines on closure of the deal," it said.
Shares of Dalmia Bharat were in focus today after the firm's wholly owned subsidiary - Dalmia Cement inked an agreement to acquire the cement, clinker and power plants of Jaiprakash Associates. Dalmia Bharat stock touched a high of Rs 1,925.70, up 1.04% on BSE within minutes of opening trade. Dalmia Bharat shares are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. However, the stock tumbled 4.67% later to Rs 1816.70 against the previous close of Rs 1905.70.
The stock opened higher at Rs 1925.70 on BSE. The stock has lost 1.85% in a year and fallen 0.01% in 2022. However, in a month, the shares have gained 10.77%. Total 7067 shares of the firm changed hands amounting to a turnover of Rs 1.31 crore in the morning session. Market cap of the firm fell to Rs 34,443 crore on BSE.
Jaiprakash Associates has a total cement capacity of 9.4 million tonne (along with a Clinker capacity of 6.7 million tonne and Thermal Power plants of 280MW). The plants are situated in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh. The deal for plants has been inked at an enterprise value of Rs 5,666 crore.
The acquisition will enable Dalmia to expand its footprint into the Central Region and will represent a significant step towards realisation of its vision to emerge as a Pan India Cement company with a capacity of 75 MT by FY27 and 110-130 MT FY31.
Also Read: Dalmia Bharat to acquire Jaiprakash Associates’ cement assets for Rs 5,666 crore
The transaction is subject to due diligence, requisite approvals from lenders/JV partner of Jaiprakash Associates and regulatory authorities. In October, Jaiprakash Associates and Jaiprakash Power Ventures had announced plans to sell stake in their cement business as well as some non-core assets to reduce debt.
Emkay Global has given a target of Rs 1,600 post the cement plants acquisition deal. Emkay said at the enterprise value, the transaction is likely to be at 30-40 per cent below replacement cost, owing to: vintage assets; lack of interest from peers; and likely need for additional capex to run the operations.
"We are yet to build the transaction in our estimate, as we await clarity on: plant-wise break-up of the acquired assets; availability of limestone reserves; optionality on capacity expansion; additional/maintenance capex required to run operations; funding break-up; and timelines on closure of the deal," it said.