Jaiprakash shares dive after sale of cement unit

Stocks

oi-Sunil

By Sunil Fernandes

Published: Thursday, September 12, 2013, 10:07 [IST]

Shares in Jaiprakash Associates fell after the company sold its cement unit to Ultratech Cement. The shares were last trading at Rs 41.85 on the National Stock Exchange, a drop of almost 4%.

Investors believe the sale should be good for Jaiprakash Assoacites as it would help the company pare some of its debt on the books. However, there was some profit booking in the counter as a lot of positions were created ahead of the deal, so there was a sell on news action in the counter.

Shares in Ultratech Cement gained as there is a possibility that the acquisition of the cement plant would be long term positive for the company.

On Wednesday Ultra Tech Cement Ltd said that it would acquire Jaypee Cement Corp Ltd., a unit of Gujarat Cement, for Rs 3,800 crore.

In a statement, the Company said that UltraTech Cement will acquire the Gujarat Cement Unit of Jaypee Cement Corp Ltd. Gujarat Cement Unit comprises of an integrated cement unit at Sewagram and grinding unit at Wankbor.

The combined capacity of both the divisions is 4.8 million tonnes along with 57.5 MW coal-based thermal power plant, limestone reserves of over 90 years at current capacity and a captive jetty at Sewagram, reported PTI.

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