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Binani Inds to buy public holding in cement unit

Binani Inds to buy public holding in cement unit
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First Published: Wed, Oct 06 2010. 07 09 PM IST
Updated: Wed, Oct 06 2010. 07 09 PM IST
Mumbai: Binani Industries Ltd said on Wednesday it received board approvals to acquire the entire public holding in its unit Binani Cement, sending shares of both companies soaring.
In a separate statement, Binani Cement said it will voluntarily delist equity shares from both BSE and NSE, after getting shareholders’ approval. Its shares rose as much as 20% on the news, while the parent’s stock rose 16%.
Traders expect that the purchase price would be decided using a reverse book-building method, which pushed up the stock price, said Jagannadham Thunuguntla, equity head at SMC Capitals.
In reverse book-building, shareholders can indicate the price at which they will tender the shares, he added. As on 30 June, promoters hold 51.28% stake, while non-institutions hold 41.75%, institutions 6.97% and foreign institutional investors hold 2.10%, BSE data showed. Binani Group is into manufacturing of cement, zinc, glass fibre and downstream composites.
Binani Industries would have to spend over Rs 700 crore to acquire the entire shareholding at the current share price, Thunuguntla said, adding that this would be part of Binani Industries internal restructuring plan.
Shares of the Binani Cement closed up 14.41% at Rs 95.65, while that of Binani Industries closed 11.4% up at Rs 121.45 in a strong Mumbai market.
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First Published: Wed, Oct 06 2010. 07 09 PM IST