Sanghi Industries Shares Jump 5%; Ambuja Cement Climbs Over 3%
The Adani Group-owned Ambuja Cements will acquire 14.66 crore shares of Sanghi Industries for Rs 5,000 crore
Shares of Ambuja Cements Ltd. rose on Thursday after it bought Gujarat-based Sanghi Industries Ltd. in an all-cash deal.
The Adani Group-owned Ambuja Cements bought the company at an enterprise value of Rs 5,000 crore, according to an exchange filing. The company will acquire 14.66 crore shares of Sanghi Industries, representing 56.74% of the overall shareholding, from Chairman and Managing Director Ravi Sanghi, members of the Sanghi family, and other promoter entities, the filing said.
Ambuja Cements will make an open offer for 26% equity, or 6.71 crore shares, of Sanghi Industries at Rs 114.22 per share and the acquisition will be complete within three to four months.
Shares of the cement company rose 0.47% to Rs 463.05 apiece as of 9:33 a.m., compared to a 0.03% decline in the benchmark NSE Nifty 50. The stock gained as much as 1.65% intraday.
The stock has declined nearly 11.62% year-to-date. The total traded volume so far in the day stood at 3.9 times its 30-day average. The relative strength index is at 71, indicating the stock may be overbought.
Of the 46 analysts tracking the company, 26 maintain a 'buy', 11 suggest a 'hold', and nine recommend a 'sell', according to Bloomberg. The average of 12-month price target given by analysts implies a downside of 2%.
The company's first-quarter revenue rose 18.3% to beat analysts' estimates.
The Adani Group-owned cement manufacturer's net profit beat Bloomberg consensus estimates though it fell 38% year-on-year to Rs 644.88 crore in the quarter ended June, according to an exchange filing. Bloomberg consensus estimates stood at Rs 494.53 crore of analysts tracked by the agency.
Shares of Sanghi Industries Ltd., on the other hand, were locked in a 5% upper circuit after the announcement of the acquisition.
The stock rose 4.98% to 105.4 apiece as of 10:24 a.m., as compared to a 0.21% decline in the NSE Nifty 50. It reached its highest level since May 16, 2018. The stock has risen 21.92% in the last five days and has gained 50.4% so far in 2023.
Total traded volume stood at 9.5 times its 30-day average. The relative strength index is at 78, implying that the stock may be overbought.
Out of the two analysts tracking the company, one maintains a 'buy' rating and one recommends a 'hold' on the stock, according to Bloomberg data. The average of 12-month price target given by analysts implies a potential downside of 33.6%.
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