Shares of cement companies dropped sharply today following reports that a cartelisation between cement companies is likely to be released shortly. The Competition Commission of India is likely to name companies engaged in cement cartelisation.
Reports suggest that many companies in the cement business produced below their capacity creating shortages and inflating prices.
Shares of ACC was down 2.57%, while Ambuja Cements was down 2.34% and Ultratech Cement was down 2.46% at 9.30 am IST. So far no companies have been named.
Shares of cement companies are expected to lose further ground as and when the CCI submits its reports.
According to a news report on Moneycontrol.com action might be taken by CCI but as per section 27 of the Competition Act. According to earlier reports penalties were expected to be to the tune of roughly 3% of company's market caps. CCI also has the power to impose a penalty of up to 8% of average turnover of past three years.