Cement stocks crack as CCI weight turns heavy

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Cement stocks crack as CCI weight turns heavy
Ambuja Cements: Quotes, News
BSE 280.10BSE Quote4.1 (1.46%)
NSE 279.90NSE Quote5.2 (1.86%)
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.


Read more about: acc, ambuja cements
Story first published: Friday, June 22, 2012, 9:37 [IST]
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