Cement stocks crack as CCI weight turns heavy

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, June 22, 2012, 9:37 [IST]

Shares of cement stocks plunged today, following a decision by the The Competition Commission of India to levy a penalty of Rs 6,000 crore on cement companies for acting in tandem to fix prices. The companies have been fined 50 per cent of their turnover for 2009-10 and 2010-11.

India Cements fell 4%, ACC fell 1.34%, Ambuja Cements dropped 2% and Ultra Tech Cement cracked 1.13%.

The companies that were fined include UltraTech, Ambuja Cements, ACC, India Cements, Binani Cement, JK Cement, Madras Cement, LaFarge and Jaypee Cement are among the companies have been fined for their role in creating and running a cement pricing cartel.

Some of the companies are expected to approach the tribunal for a relief.
Industry observers say that the amount is rather large and some cement companies are heavily debt laden and may find the ability to raise resources tough.

Cement stocks are expected to fall further on the back of the order, as analysts believe if there is no relief it would certainly have an impact on the financial performance of cement companies.

GoodReturns.in