Shares of cement manufacturers ACC and Ambuja Cements rallied up to 10 per cent in intraday trade on the Bombay Stock Exchange after the companies received board nod for renewal of technology fees agreement with their parent company, Holcim Ltd. The tech fees to Holcim have been fixed at 1 per cent of net sales per annum for two years with effect from January 1, 2021.
The board of directors of ACC and Ambuja Cements, at their meeting held on December 23, 2020, approved the renewal of the current technology and know-how agreement (TKH Agreement) with foreign promoter Holcim Technology Limited (HTL). As per the agreement, these two Indian companies will pay 1 per cent of net sales each year for period of 2 year to Holcim as TKH fees.
"The companies pay TKH fees @ 1 per cent of net sales each year, to HTL, for a period of 2 years w.e.f. January 01, 2021 on the same terms as the present TKH agreement," ACC and Ambuja said in a separate regulatory filing.
Following the announcement, shares of Ambuja Cements rallied 9.96 per cent in intraday trade to Rs 261 apiece on the Bombay Stock Exchange. The stock was trading near its 52-week high of Rs 271.95 touched on November 17, 2020.
In a similar trend, shares of ACC rose as much as 6.69 per cent to hit an intraday high of Rs 1,692.95 after opening sharply higher at Rs 1,685.30, against the previous closing price of Rs 1,579.65. On the volume front, there was surge in buying as 1.42 lakh shares changed hands over the counter as compared to two-week average volume of 0.49 lakh shares.
Both the cement stocks had underperformed the market by declining nearly 10 per cent in the last three weeks, against 4 per cent fall in the benchmark index, till Wednesday.
Meanwhile, the BSE SENSEX was trading 562 points, or 1.21 per cent, higher at 47,006.
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