BusinessLine, Friday, Sep 07, 2007
Chennai, Sept. 6 The Sanmar group, led by Mr N. Sankar, will sell its residual stake in India Cements Ltd, to the co-promoters led by Mr N. Srinivasan, Vice-Chairman and Managing Director, India Cements, and his family.
In an announcement to the stock exchanges on Thursday, India Cements said three investment companies (belonging to Mr Srinivasan and his family) will acquire the 2.64 per cent stake held by the Sanmar group's investment company on September 14. The acquisition price will be the market price on that day.
India Cements' shares closed at Rs 274.50 today on the National Stock Exchange. At this price, the sale of 68.86 lakh shares by the Sanmar group to the co-promoters will fetch it about Rs 190 crore.
Diluting take process
The Sanmar group began the process of diluting its stake in India Cements in September 2005, when it sold a 11.91 per cent stake to Mr Srinivasan and his family for about Rs 192 crore. Since then, the Sanmar group has gradually reduced its stake in the company.
At that time, Mr Sankar had said that the Sanmar group needed funds for its various projects, especially a poly vinyl chloride plant it was planning to implement.
When contacted today, Mr Srinivasan said it was an arrangement between the two promoter families.
Mr Sankar told Business Line today that “this is only a friendly internal arrangement.”
Asked if he would continue as chairman of the company, he said that his selling off the residual stake did not mean that he would not be the chairman.
On how he felt to be out of a company that he had been associated with as a shareholder for decades, Mr Sankar said “I am the chairman. How much more can I be associated with the company?”
India Cements was established in 1946 jointly by S.N.N. Sankaralinga Iyer, Mr Sankar's grandfather, and T.S. Narayanaswami, Mr Srinivasan's father.
The company's first plant came up in Tamil Nadu in 1949.
The company now has a capacity of nine million tonnes, which it is expanding to 15 million tonnes within the next 18 months.